Why India’s economy remains resilient amid global slowdown

At a time when global markets face economic slowdown, geopolitical tensions, and prolonged uncertainty, neighbouring India’s economy has demonstrated notable resilience. Despite headwinds in international markets and trade volatility, the country’s macroeconomic indicators reflect underlying stability, leaving little room for pessimism regarding its growth trajectory, according to economists and market analysts.

Projections and data spanning the 2025–26 and 2026–27 fiscal years indicate that India’s Gross Domestic Product (GDP) is expanding at an annual rate of 7.5% to 7.8%. Recent figures released by the Ministry of Statistics and Programme Implementation show that even as global crude oil prices surged to an average of around $97 per barrel, the Indian economy sustained a 7.8% growth rate in the first quarter—an expansion rate surpassing those of most major global economies.

Economists attribute this performance to several core macroeconomic pillars.

India’s current account deficit remains under control, while its fiscal deficit continues within manageable parameters. Commercial bank balance sheets are at their strongest levels in years, and corporate debt leverage sits near historical lows. Concurrently, the manufacturing sector is outpacing broader GDP growth, driven largely by multinational corporations executing "China Plus One" diversification strategies. Data through August also highlights approximately 15% year-on-year growth in services exports.

Read More

India approves $1.5b grid storage push to power clean energy drive

Robust foreign exchange reserves and timely external financing arrangements have further served as a buffer against escalating energy import costs and bond market fluctuations.

Although the domestic equity market witnessed temporary downward pressure over the past two years due to capital outflows by foreign institutional investors (FIIs), market analysts noted a divergence between equity sentiment and macroeconomic reality. While stock markets often react to short-term sentiment, long-term performance remains anchored to underlying corporate earnings.

Data from the National Stock Exchange (NSE) indicates that India’s annual domestic financial savings have reached approximately $1.4 trillion. This domestic liquidity pool provides a substantial cushion, mitigating the impact of foreign capital withdrawals and sustaining investment across the domestic economy.