Robust fundamentals, reform push drive India's economic resilience: Finance ministry review

The government's recent policy initiatives, including the setting up of a Task Force for Next-Generation Reforms and the forthcoming GST reforms, deregulation initiatives of the States, coupled with the sovereign rating upgrade, are set to reduce borrowing costs, attract foreign capital, and bolster investment and consumption, the report for July released on Wednesday said.

"These reforms mark the beginning of an accelerated phase of governance transformation, ensuring that India extends its own line of progress, becoming more resilient, inclusive, and globally competitive in an era of rising global economic self-interest," it read.

Robust macroeconomic performance and sound fundamentals over the past few years have earned India a well-deserved sovereign rating upgrade by the S&P credit rating agency to 'BBB'.

The rating upgrade underscores India's resilient growth, anchored inflation expectations, and stronger credit metrics, underpinned by fiscal consolidation and improved quality of spending, the monthly review said.

Building on the growth momentum gained during Q1 of FY26, the Indian economy continues to reflect resilience in July 2025.

"Record e-way bill generation and a 16-month high in PMI manufacturing point to robust business activity. Further, the stronger expansion in the services PMI indicates growth in the services activity," the report read.

Driven by a favourable base effect and deflation in food items, the headline inflation has continued to ease since October 2024, falling below the 2 per cent tolerance threshold in July 2025.

In the dynamic global trade landscape, India has adopted a calibrated approach to negotiating FTAs, aiming to expand market access while protecting domestic interests, it lauded.

"Recently, two major agreements, the India-UK CETA and the India-EFTA TEPA, have been concluded, and negotiations continue with a few other nations," it has apprised. (ANI)