India Remains Among the Fastest Growing Major Economies Despite Global Uncertainties: RBI

New Delhi, July 23: India continues to be one of the fastest-growing major economies in the world, successfully maintaining robust economic activity through June, despite global uncertainties. The Reserve Bank of India (RBI) has reported that indicators in both the industrial and service sectors remain strong.

According to the RBI, while the distribution of the southwest monsoon in the agricultural sector has been uneven, the ample food grain reserves are likely to limit the impact on food inflation.

The RBI’s July bulletin states, “In the first quarter of the fiscal year 2026-27, strong growth in exports and imports has sustained the momentum in foreign trade. The recent implementation of the India-UK Comprehensive Economic and Trade Agreement (CETA) and progress in other bilateral trade agreements are expected to further strengthen this momentum.”

The central bank noted that indicators related to external sector sensitivity remain robust. A recovery in foreign investments in recent months indicates a return of investor confidence in the economy.

The bulletin also highlighted that the global economy continues to face challenges such as an uncertain economic environment, supply chain disruptions, and fragmented trade relations.

Nevertheless, due to strong domestic demand and resilient performance in the industrial and service sectors, the Indian economy has successfully navigated external challenges.

The RBI reported a slight increase in retail inflation in June, while core inflation, excluding precious metals, remained at low levels. Improved liquidity conditions have supported strong credit growth. Thanks to the inflow of foreign investments, India’s external sector has remained stable and is showing signs of improvement.

During April-May 2026, gross and net Foreign Direct Investment (FDI) exceeded levels from the same period last year. Additionally, the net inflow of Foreign Portfolio Investment (FPI) turned positive in June and has remained favorable in July amid reduced geopolitical tensions and policy support.

The RBI also noted gains in Indian stock markets in June. However, following the end of a ceasefire in early July, the stock markets have traded within a limited range.

The central bank concluded that by the end of March 2026, India’s key external risk indicators remained strong and balanced.

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ABs