India can turn the global volatility into an opportunity with the help of calibrated policy support, strengthening its position in the emerging economic landscape, Reserve Bank of India’s latest bulletin said on April 22.
The nation is hopeful of benefitting from supply chain realignments, diversified FDI sources, and engagement with global investors seeking resilience and scale, given that it already has established trade linkages, said RBI.
Moreover, the consistent strength in India’s services exports and remittance inflows provide a vital buffer for the current account, the bulletin added.
The imposition of tariffs by US President Trump earlier this month had jolted the global economy and financial markets, including India, fanning potential slowdown fears, however, the uncertainty has eased after Trump paused the reciprocal tariffs for 90 days.
RBI Governor Sanjay Malhotra during the April 9 monetary policy announcement had said that the recent tariffs announced by President Trump have dampened the global sentiment and fueled uncertainty. "The dent on global growth due to trade frictions will also impede domestic growth," the RBI governor had said, adding that higher tariff will have negative impact on net exports.
"Slowdown in global growth could entail further softening in commodity and crude oil prices. Prospects of agriculture sector remain bright, in the light of healthy reservoir levels and robust crop production," RBI governor said. The central bank has projected a GDP growth of 6.5 percent, revised lower from the February forecast.
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