June 17, 2025 8:33 pm
Full News

India Faces Economic Slowdown Amid Global Uncertainty and Domestic Challenges

NEW DELHI – After world-beating economic growth last year, India’s policymakers are scrambling to head off a sharp slowdown as worsening global conditions and domestic confidence wipe out a recent stock market rally.

On Tuesday, Asia’s third-largest economy forecast annual growth of 6.4% in the fiscal year ending in March, the slowest in four years and below the government’s initial projections, weighed by weaker investment and manufacturing.

The downgrade follows disappointing economic indicators and a slowdown in corporate earnings in the second half of 2024, which have forced investors to rethink the country’s earlier outperformance and cast doubts over Prime Minister Narendra Modi’s ambitious economic targets. The fresh worries are heightening calls for authorities to lift sentiment by loosening monetary settings and slowing the pace of fiscal tightening, especially as Donald Trump’s looming second presidency throws more uncertainty over the global trade outlook.

“You have to revive the animal spirit, and you also have to ensure that consumption picks up. It’s not that easy,” Madhavi Arora, chief economist at Emkay Global Financial Services, said, adding India could expand its fiscal balance sheet or cut interest rates.

Such calls come amid a flurry of meetings by Indian policymakers with businesses growing increasingly worried about faltering demand.

Finance minister Nirmala Sitharaman held a series of meetings in December with industry and economists, customary ahead of India’s annual budget, which is due Feb. 1. Some of the measures proposed in those talks to boost growth include putting more money into the hands of consumers and cutting taxes and tariffs, according to demands by trade and industry associations.

Growing Concerns

The worries about India’s economy knocked 12% off the benchmark Nifty 50 index from late September to November. It clawed back those losses to end 2024 up 8.7%, a decent gain but well off the previous year’s 20% surge.

As confidence wanes, the political urge to stimulate growth appears to be broadening.

India’s monthly economic report published last month said the central bank’s tight monetary policy was partly responsible for the hit to demand.

Modi has made some high-profile changes recently that are expected to lift economic growth as a priority over price stability.

In a surprise move in December, Modi appointed Sanjay Malhotra as the new central governor, replacing Shaktikanta Das, a trusted bureaucrat who was widely expected to get another one to two-year term as bank chief after having completed six years at the bank.

The appointment of Malhotra, who recently said the central bank will strive to support a higher growth path for the Indian economy, came immediately after the September quarter growth slowed much more than expected to 5.4%.

During the pandemic, Modi sought to keep the economy growing by raising infrastructure spending and limiting wasteful expenditure to keep government finances in good shape.

That lifted headline GDP growth but has not supported wages or helped consumption sustain an annual expansion of more than 7% over the past three years.

While India’s economy may still outperform globally, the question is whether it can maintain 6.5%-7.5% growth or slow to 5%-6%, said Sanjay Kathuria, visiting senior fellow at Centre for Social and Economic Progress.

Arora said the country currently is in a “bit of a limbo” where individuals are not spending. She expects this to continue if employment does not improve and wage growth remains weak.

Reuters reported last month the government plans to cut taxes for some individuals and is preparing to offer tariff cuts on some farm and other goods mainly imported from the U.S., to clinch a deal with Trump.

Economists say the government will have to slow some of its fiscal tightening to support growth with the success of such measures dependent on the extent of the cuts.

With regards to trade, analysts say India needs a credible plan to fight Trump’s tariff wars.

If China remains the main target of Trump’s tariffs, that could present an opportunity for India to boost its trade profile, although it would also need to let the rupee fall further to make its exports more competitive, economists said.

India needs to “seriously implement tariff rationalisation to help embed itself more deeply into global value chains,” Kathuria, also an Adjunct Professor at Georgetown University, said.

This could include tariff cuts aimed at pre-emptively heading off punitive levies from a Trump White House.

“India should announce some proactive measures for U.S. suo-moto to bring concessions for the U.S. rather than waiting for the new administration to announce their steps,” said Sachin Chaturvedi, head of the New Delhi-based Research and Information System for Developing Countries.

Related News
Marshall Brickman, Oscar-Winning Writer of ‘Annie Hall,’ Dies at 85
First Public Caning for “Close Proximity” in Malaysia Sparks Outrage Over Religious Laws
PM Modi Holds High-Level Meeting on Bangladesh Crisis; Major Action Likely
‘No need’ to advise Mbappe on offside
Famous Spanish Actress Marisa Paredes Dies at 78
South Africa’s EFF Seeks to Revive Impeachment Proceedings Against Ramaphosa
Related Posts
Four Receive Suspended Sentences for Hate Crime Against Vinícius Jr
We Now Have Full Control Over Iranian Airspace: Trump
Iran’s Supreme Leader Khamenei Faces Strategic Losses as Inner Circle Targeted by Israel
North Korea to Help Russia Rebuild Kursk, Kim Promises ‘Unconditional Support
Russia Launches Deadliest Strike on Kyiv in Months, Dozens Injured and Killed
Trump Rejects Ceasefire, Calls for “Real End” to Iran’s Nuclear Program as Israel Intensifies Strikes
More News

US Calls for Inclusion of Arakan Army in Rohingya Repatriation Talks

The United States has introduced a significant proposal at the United Nations regarding Rohingya repatriation, which could pose new challenges for Bangladesh’s interim government and National Security Advisor Khalilur Rahman (Roger Rahman).On June 10, the US advocated for a comprehensive and inclusive dialogue to ensure the safe and voluntary return of Rohingya refugees. Crucially, the […]

Japan, US, and South Korea Strengthen Alliance, Announce Creation of Trilateral Secretariat

Prime Minister Shigeru Ishiba of Japan, U.S. President Joe Biden, and South Korean President Yoon Suk Yeol met on the sidelines of the Asia-Pacific Economic Cooperation (APEC) leaders’ summit in Lima to discuss strengthening their cooperation. During their meeting, the leaders reached a consensus to establish a trilateral secretariat, aiming to enhance collaboration among the […]

Bangladesh Army Strengthens Security Amid Political Unrest

The Bangladesh Army has heightened security measures across various regions of the country, reportedly wrapping key government institutions and installations under tight protection. This move comes amid recent political and social unrest, prompting authorities to reinforce national stability. According to military sources, army personnel have been deployed in strategically important areas with intensified routine patrols. […]

Iran Expands Military Drills to Include Fordow and Khondab Nuclear Sites

TEHRAN – Iran has expanded its military drills, dubbed Eqtedar (meaning “might” in Farsi), to cover two additional nuclear facilities in the west and center of the country, state media reported on January 12. The drills, which began last week and are set to continue until mid-March, involve the army and the Islamic Revolutionary Guard […]

European Leaders to Convene in Paris Amid U.S. and Russia Talks on Ukraine

Dhaka, February 17, 2025 – In a surprising move, U.S. President Donald Trump initiated discussions on Russia’s invasion of Ukraine with Russian President Vladimir Putin, catching Ukraine and its European allies off guard. This development has prompted French President Emmanuel Macron to host an emergency meeting with key European leaders on Monday to address the […]

U.S. Imposes Sanctions on ICC Judges

The Voice News: The administration of U.S. President Donald Trump has imposed sanctions on four judges of the International Criminal Court (ICC), accusing them of taking “illegal and baseless” actions against the United States and its allies. According to a report by Al Jazeera on Friday (June 6), U.S. Secretary of State Marco Rubio announced […]

Earthquake Off Peru’s Coast Shakes Lima, Leaves One Dead and Five Injured

The Voice News: A magnitude 5.6 earthquake struck off Peru’s central coast on Sunday morning, jolting the capital city of Lima and the nearby port city of Callao. Authorities confirmed that one person was killed and five others injured in the aftermath.According to the U.S. Geological Survey, the quake occurred at 11:35 a.m. local time, […]

Why Digital Twins Could Revolutionize Drug Discovery

This is the first in a six-part series exploring how AI is transforming medical research and treatment. In front of me is a heart that beats and moves like a human organ—but it isn’t real. There’s no blood flowing through it, nor is it housed in a human body. This is a digital twin: a […]

Russian Missile Attack on Kyiv Damages Six Embassies, Leaves Casualties

A Russian missile strike on Kyiv, the capital of Ukraine, has resulted in at least one death and multiple injuries. According to Ukraine’s Foreign Ministry, the attack caused damage to six diplomatic missions: those of Albania, Argentina, North Macedonia, Palestine, Portugal, and Montenegro.Missile strikes were also reported in the southern city of Kherson, where one […]

Hollywood’s Top Stars of 2024

In Hollywood, stardom is not just about joining big movies but also about consistently landing major roles in successful films, which increases both the earnings and popularity of the stars. Glen Powell, Zoe Saldana, and Margot Robbie are at the top of the list this year due to their long-lasting presence in the industry. Additionally, […]