The Ministry of Finance has warned that India’s economic growth in FY 2025-26 may face significant pressure due to global trade tensions and rising geopolitical uncertainty. These global developments could disrupt supply chains, drive up import costs, and create obstacles for domestic businesses.
The ministry’s Chief Economic Adviser emphasized that ongoing international conflicts and unstable trade dynamics are creating a fragile environment for economic progress. As a result, the country must prepare for potential ripple effects on inflation, investment, and consumer confidence.
Private Sector Urged to Stay Alert
Unlike in previous years, business leaders may hesitate to invest amid growing uncertainty. This hesitation can delay capital projects and weaken the pace of economic recovery. To maintain momentum, the report encourages companies to act swiftly and adapt to global changes rather than wait for clarity.
Moreover, the government highlights the importance of staying proactive. Quick decision-making, especially during unpredictable periods, has the potential to produce stronger results than during normal economic conditions.
IMF Lowers India’s Growth Projection
Recently, the International Monetary Fund (IMF) revised India’s GDP forecast for FY 2025-26. Originally set at 6.5%, the growth estimate has now been reduced to 6.2%, mainly due to rising global tensions and fears of a slowdown in international trade.
This downgrade reflects growing concerns about how global instability could affect both exports and foreign investments in India.
Government Commits to Fiscal Discipline
In response to these concerns, the federal government remains focused on reducing public debt. By doing so, it aims to free up more domestic savings, which in turn can fuel private sector investment and long-term economic expansion.
Furthermore, the government is encouraging both the private sector and policy planners to collaborate and adopt forward-looking strategies. This partnership will be essential to counter any shocks from the global market.
