India's economy is expected to continue to enjoy a strong 6.5% growth rate in the current fiscal year despite heightened uncertainty and money market volatility all over the world.
This favorable prediction was offered by Reserve Bank of India Governor Sanjay Malhotra during his speech to the US-India Economic Forum, which the Confederation of Indian Industry (CII) and the US India Strategic Partnership Forum (USISPF) organized.
Malhotra reasserted that even while most mature economies face economic difficulties, India still presents a solid growth trajectory and stability and thus a suitable location for long-term investment. He complimented India's policy environment, which he described as being transparent, rule-based, and forward-looking, thus providing a healthy environment for productive investment.
Emphasizing India's phenomenal economic growth, Malhotra noted that India's economy has expanded at a mean annual growth rate of 8.2% in the past four years (2021-22 to 2024-25), and it is the fastest-growing large world economy. The growth rate is surpassing the 6.6% decade average of the past decade (2010-2019). Consequently, India has transitioned from being the 10th largest economy to the 5th largest one and is poised to become the third-largest economy on a nominal as well as purchasing power parity basis soon.
He was also optimistic of sustained economic growth in India with the reference to some encouraging factors like the health and strength of the financial system, which is coping with the financing requirements of the economy satisfactorily. Banking sector, specifically, is also robust with healthy profitability, nil non-performing assets, and sufficient capital and liquid buffers. Besides that, non-banking financial institutions (NBFCs) are also healthy.
Though bank credit growth has decelerated in recent times, it is still in double digits (at about 12%), well above the 10.5% historic average over the past 10 years. Malhotra went on to highlight that investment opportunities in India are great, specifically in sunrise industries such as space, semiconductors, renewable energy, and electric vehicles (EVs) due to vision-driven government policies to promote investments in the sunrise industries.
With a favorable economic environment, India remains a safe bet for investors looking for long-term growth and value.
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