India’s economy is showing strong growth amid cooling prices. As the finance ministry’s September update notes, private consumption and investment are looking up. Where today’s global trade storm leaves our export prospects, though, remains a big question.
India's economy is showing strong growth amid cooling prices. As the finance ministry's September update notes, private consumption and investment are looking up. Where today's global trade storm leaves our export prospects, though, remains a big question.
Going by recent indicators, India's economy seems to be in good shape, with growth high and inflation low. But the global environment is volatile and should some disruptive shock arise externally, India's growth could be affected.
The finance ministry's economic report for September issued on Monday sees healthy domestic demand and low inflation, especially in the wake of above-normal rainfall and the cut in GST rates, acting as growth supporters. Also, it notes, household consumption and private investment are faring well.
This is noteworthy in the context of a prolonged slump in the latter and an uneven recovery in the former after the pandemic. Overall, the report's tone is optimistic, although sprinkled with a dose of caution on a few risks.
Until India finds safe harbour from today's global trade storm, with brighter export prospects in sight, our economy will remain vulnerable, domestic policy support measures notwithstanding.
Unfortunately, we have had mixed signals on how talks are going with the US. While domestic drivers of GDP are important, we can't do without export success. The global record shows that its role in fast economic expansion is vital.