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India remains among the fastest-growing major economies despite an uncertain global economic environment and has been able to sustain the momentum in economic activities through June, according to the Reserve Bank of India's (RBI) latest Bulletin.
The RBI said the global economy is dealing with an uncertain economic environment, supply chain disruptions and fragmented trading relationships. Amid these challenges, India has maintained the pace of economic activity, with both industrial and services sector indicators remaining firm. "Amidst these uncertainties, India remains among the fastest growing major economies across the globe and has been able to sustain the momentum in economic activities through June," the RBI said in the bulletin. According to the bulletin, the farm sector is witnessing an uneven southwest monsoon. However, the impact on food inflation may be mitigated by comfortable foodgrain stocks. The central bank also noted that the momentum in external trade remained strong during the first quarter of 2026-27, as reflected in high growth in both exports and imports. It said the momentum is likely to be further strengthened by the recent operationalisation of the India-UK Comprehensive Economic and Trade Agreement and progress in other bilateral trade agreements. The bulletin added that India's external vulnerability indicators have remained sound, while the recovery in foreign investments in recent months points to a revival of confidence in the country's economy. On the global front, the RBI said the world economy continues to navigate through a tumultuous phase marked by high uncertainty. It noted that the breakdown of ceasefire talks in West Asia has once again disrupted global supply chain networks, reversing fragile recoveries. At the same time, investments linked to artificial intelligence (AI) and technological transformation continue to support the global economy. According to the Bulletin, easing tensions in West Asia through June helped stabilise financial markets and business sentiment. However, the truce proved to be short-lived, with the collapse of the peace arrangement in early July pushing the outlook for global trade and inflation risks back into a zone of uncertainty. The RBI further said that globally, the risk to the growth outlook remains tilted to the downside due to the possibility of renewed tensions in West Asia, disruptions in global supply chains and sustained inflationary pressures. Despite these global headwinds, the bulletin said India has continued to demonstrate resilience, supported by steady economic activity, firm industrial and services sector performance, healthy external sector indicators and improving foreign investment inflows. (ANI)
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