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The Reserve Bank of India (RBI), in its latest State of the Economy article published in the RBI Bulletin of October 2025, noted that while the Indian economy is not immune to global headwinds, it continues to demonstrate resilience.The bulletin attributed this resilience to strong and durable macroeconomic fundamentals, including low inflation, robust balance sheets of banks and corporates, adequate foreign exchange reserves and a credible monetary and fiscal framework.
It says, "While the Indian economy is not immune to global headwinds, it has so far exhibited resilience, driven by a focus on strong and durable macroeconomic fundamentals - including low inflation, robust balance sheets of banks and corporates, adequate foreign exchange reserves and a credible monetary and fiscal framework." Amid renewed trade tensions and rising protectionism across advanced economies, the RBI emphasised that the domestic economy remains on a steady path, supported by structural reforms and sustained domestic demand. "The state of flux of the global economy and policies presents considerable uncertainties to the macroeconomic outlook. In this scenario, the need for economic resilience has become a key priority," noted the RBI bulletin.It, however, raised concerns on trade tensions but said, "Trade tensions have started to simmer yet again. In the context of rising protectionism in the US, and rising fiscal risks in AEs." The report further highlighted that the country's growth outlook remains resilient, with domestic drivers helping to offset the drag from weakening external demand. According to the Monetary Policy Committee's October resolution, India's real GDP growth for FY2025-26 has been revised upwards to 6.8 per cent, while CPI inflation has been projected lower at 2.6 per cent.On the weakening of the Indian rupee against the US dollar, the central bank says, "The depreciation in the real effective exchange rate was mainly driven by the depreciation in the nominal effective exchange rate."The Central Bank also underscored that adequate foreign exchange reserves and a stable financial system provide a buffer against external shocks, ensuring that India remains among the fastest-growing major economies despite the global slowdown. "India's foreign exchange reserves remained adequate, providing a cover for more than 11 months of goods imports and for about 93 per cent of the external debt outstanding at end-June 2025," said RBI bulletin. (ANI)
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