Indian economy has shown a lot of resilience in the recent times. While the major economies were struggling to keep afloat, Indian economy was marching ahead with impressive growth rate. Even during the Covid, Indian economy was progressing at a decent rate. However, the recent upheaval in the world trade environment have impacted the Indian economy adversely, especially the reciprocal tariffs enforced by Trump administration. This is indeed going to slowdown the economy as a lot of jobs are at stake as are the future of various industries dependent upon the US orders.
The International Monetary Fund’s latest observation that India must “fire on all cylinders” serves both as a compliment and a caution. India remains the world’s fastest-growing major economy in a slowing global environment but it must act to sustain this trajectory. Maintaining the momentum demands reform, integration, and innovation working together in harmony. IMF Asia-Pacific Director Krishna Srinivasan’s remarks underscore a critical truth: India’s growth story cannot rely on a single engine. The country’s economic fundamentals are indeed robust — growth projected at around 6 per cent, inflation moderating, and the fiscal deficit under control. Yet, these strengths will not automatically translate into long-term prosperity unless India deepens its reform agenda and embraces a more outward-looking economic model.
The IMF’s advice is clear — India must strengthen domestic demand while simultaneously integrating more deeply with global trade networks. In recent years, India’s focus on self-reliance through the Atmanirbhar Bharat initiative has bolstered local manufacturing and reduced import dependence.
Srinivasan has rightly cautioned that India should not see domestic growth and global integration as two different things. The challenge is not to choose between the two, but to synchronise them.
Trade liberalisation, flexible labour laws, and regulatory simplification are the other “cylinders” that must be fired up. Despite significant reforms like the Goods and Services Tax (GST) and production-linked incentive schemes, India still faces bottlenecks that constrain private enterprise. Complex regulations, high tariffs, and labour rigidities continue to impede the scalability of industries. To attract global supply chains, India must make its trade regime more predictable and its business environment more agile.
A more liberal trade posture could enable Indian industries to participate more fully in global value chains — particularly in electronics, green technology, and digital services, where demand is expanding. This would not only boost exports but also drive innovation, investment, and job creation. Domestic investment and innovation form another vital front. Strengthening financial markets, improving access to credit for small enterprises, and incentivising research and development will be crucial for sustaining productivity-driven growth. If India has to achieve the vision of Viksit Bharat by 2047, it must balance ambition with adaptability.
