India's Resilient Economy Surfaces Amid Global Trade Uncertainty, Says Economic Survey

The Economic Survey 2025-26 has highlighted India's resilience amid ongoing global trade disruptions driven by unilateral tariff actions and rising geopolitical tensions. Despite these challenges, strong domestic fundamentals have helped offset external pressures, according to the Survey.

The report underscores an evolving trade policy environment shaped more by strategic and political factors than by multilateral rules. Recent U.S. tariff actions surprised many when they included additional penalties on Indian exports, even as India was anticipated to benefit from the new U.S. tariff regime.

India's economic momentum remains intact, with steady growth projections, contained inflation, healthy banks, and strong corporate balance sheets, as emphasized by the Survey. However, it also points out a paradox: India's robust macroeconomic performance faces a global system that no longer supports currency stability and capital inflows.

Global uncertainties have visibly impacted capital flows and investor sentiment. Emerging markets are notably vulnerable, with projected slowdowns in trade growth. For India, external risks manifest as intermittent pressures on exports and currency stability, with the undervalued rupee cushioning higher tariffs' impacts.

Looking forward, the Survey warns of prolonged global fragmentation as a principal risk but maintains optimism for India's steady growth, driven by domestic demand, robust balance sheets, and reforms. It notes the need for caution amid global uncertainty but dismisses pessimism.