IMF trims forecast

In a global economy reeling from geopolitical uncertainty and protectionist shocks, India stands out as a relative beacon of stability. The International Monetary Fund (IMF), while lowering India’s FY26 growth projection from 6.5 per cent to 6.2 per cent, still affirms its status as the world’s fastest-growing major economy. At a time when global growth is expected to slip to 2.8 per cent, that is no small achievement. The downward revision is not rooted in domestic weakness, but in international turbulence — most notably, US President Donald Trump’s sweeping tariff regime. The IMF’s warnings are stark: with tariffs at century-high levels and trade tensions escalating, the global economy faces “major negative shocks.” India may not be at the centre of this storm, but it is certainly navigating through its edges.

Encouragingly, India’s rural consumption and moderate inflation (projected at 4.2 per cent) provide internal stability. However, this resilience must now be paired with strategic diplomacy. In a world where multilateral trade frameworks are faltering, it is increasingly important for countries — including India — to negotiate bilateral trade agreements to cushion the blow of shifting global trade currents. One-on-one deals offer agility, economic insulation and a hedge against erratic global policies. China, the US, and the EU are already recalibrating their trade ties. India too must widen its portfolio by courting new markets in Africa, Southeast Asia and Latin America, while reinforcing strategic partnerships with major economies. This approach not only helps absorb external shocks but also positions India as a proactive player in a rapidly evolving global order.

India’s economic fundamentals remain strong. But in a world marked by tariff wars and strategic realignments, growth must be protected with firm negotiation. India should strive to shape a more resilient and cooperative global economic future.

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