Sukumar Sah
NEW DELHI:
The Reserve Bank of India (RBI) has painted a confident portrait of an economy that refuses to buckle under global strain. Far from being a passive spectator in a volatile world, India has emerged, the RBI said, as a rare outlier of stability and growth.
“The Indian economy displayed resilience amidst broader global uncertainty and weak external demand,” the RBI says in its October 2025 Bulletin. The apex bank has credited this endurance to “strong and durable macroeconomic fundamentals.” Behind that resilience lies a deliberate policy mix — fiscal discipline, low inflation, and a credible monetary framework — that has kept the economic engine steady even as global conditions waver.
The bulletin contrasts India’s steadiness with the turbulence overseas. It observes that in the United States, both trade and economic policy uncertainty increased in September, while investor sentiment turned cautious in October due to renewed US-China trade tensions and a prolonged government shutdown. “Global uncertainty has edged up,” the report says, though it also notes that global growth, overall, “has broadly held up.”
Amid this fragile backdrop, India’s macroeconomic position stands out. The RBI highlights that “low inflation, robust balance sheets of banks and corporates, adequate foreign-exchange reserves, and a credible monetary and fiscal framework are the bedrock of resilience.”
Headline inflation, it notes, had moderated sharply in September to its lowest level since June 2017, giving policymakers “greater leeway to support growth without compromising price stability.”
RBI Governor Sanjay Malhotra emphasised this delicate balance, remarking that “despite the external environment having deteriorated since the August policy, the economy remains poised to register high growth. The sobering of inflation has given greater space for monetary policy to support expansion.”
The central bank’s confidence matters far beyond the realm of macroeconomics. For business and industry, stability in policy and inflation is a vital signal. It enables long-term investment decisions, expansion planning, and corporate strategy. When the RBI underlines “strong and durable macroeconomic fundamentals,” it is also sending a message to global investors — that India remains a predictable and dependable place to do business.
High-frequency data point to steady domestic activity. “Urban demand is showing signs of revival, while rural demand remains resilient,” the bulletin said. This consumption recovery, supported by strong Government capital expenditure, continues to crowd in private investment. Although exports face headwinds, internal growth engines — consumption, investment, and services — are keeping the economy buoyant.
Finance Minister Nirmala Sitharaman echoed the RBI’s confidence, stating that “amidst this uncertain global environment, India’s resilience stands out. Strong macroeconomic fundamentals, a young demography, and greater reliance on domestic demand provide the core strength to withstand global spillovers.”
She added that this resilience “is not accidental — it is the result of proactive fiscal and monetary policies, massive infrastructure creation, improved governance, and enhanced competitiveness over the last decade.”
India’s performance has not gone unnoticed abroad. The International Monetary Fund (IMF) recently revised its 2025 growth forecast for India upward to 6.6 per cent, citing “strong domestic fundamentals.” The OECD, too, projected growth at 6.7 per cent, underscoring India’s ability to sustain momentum even as global demand weakens.
Commerce Minister Piyush Goyal welcomed the recognition: “The IMF’s upward revision reflects confidence in India’s fundamentals and the consistency of our economic reforms.”
The RBI’s tone has given corporate India reason for optimism. “What businesses crave most is predictability. India’s resilience reassures us that policy will remain stable and growth-oriented,” said Sunil Kant Munjal, Chairman of Hero Enterprise. This stability, he added, encourages companies to make long-term commitments essential for job creation and productivity gains.
Foreign investors share the sentiment. “The RBI’s message tells global capital that India is not just growing fast but growing safely,” said Radhika Rao, Senior Economist at DBS Bank. “That combination is increasingly rare in today’s world.”
The RBI noted that “favourable inflation and stability outlooks provide policy space for supporting growth.” For policymakers, this means the flexibility to pursue measures that stimulate manufacturing, infrastructure, and private investment. For small and medium enterprises, macroeconomic steadiness ensures access to credit at reasonable rates and shields them from inflation shocks. For large corporates, it builds confidence to expand capacity and explore global markets.
Still, the central bank remains cautious. It warned that India is “not immune to global headwinds,” citing weak external demand, trade-policy shifts, and geopolitical frictions. “Portfolio outflows and currency pressures could resurface in the wake of heightened global volatility,” the bulletin cautioned.
Economists agree that the next phase of India’s growth must be driven by investment. Former Chief Economic Adviser Arvind Subramanian observed, “India’s consumption-driven recovery has been impressive, but the next phase must focus on investment-led expansion. That’s where productivity gains and job creation will truly accelerate.”
To that end, sustaining reforms that improve logistics, enhance manufacturing competitiveness, and deepen financial markets will be critical.
Finance Minister Sitharaman summed up the essence of India’s strength: “Robust domestic consumption is a bulwark against external shocks.” This shield has allowed India to sustain momentum even as advanced economies struggle with stagflationary pressures.