India’s economic trajectory for FY 2025 is facing headwinds as NITI Aayog member and renowned economist Arvind Virmani revises his GDP growth projection to 6.5-7%, slightly lower than the earlier estimate of 6.5-7.5%. Global uncertainties, particularly in the United States and China, are the key drivers behind the adjustment.
Virmani highlighted the potential ripple effects of heightened political uncertainties in the US, including the upcoming elections. These dynamics are influencing global markets, further complicated by economic instability in Europe and a decelerating Chinese economy.
China’s capacity-building strategies, aimed at stabilizing its growth, are another concern. Virmani argued that these measures are adding to global risk aversion, potentially dampening investment flows and economic confidence worldwide.
Despite these challenges, Virmani remains optimistic about India’s long-term economic potential. He underlined the critical need for India to sustain a minimum 6% growth rate over the next quarter-century to transition into a high-income economy comparable to China.
He emphasized the importance of improving the investment climate across Indian states. Targeted reforms, streamlined regulatory processes, and fostering innovation were identified as key to unlocking higher economic productivity.
Virmani’s comments underscore both the opportunities and challenges for India in navigating a volatile global economic landscape. While immediate uncertainties may temper growth projections, India’s robust economic fundamentals and strategic reforms could pave the way for long-term prosperity.
As India balances domestic priorities with global disruptions, economists and policymakers alike stress the importance of resilience and adaptability in charting the nation’s economic future.
