India adopting 'multi-pronged approach' to beat global headwinds: MoS for finance

The government has adopted a “multi-pronged approach”, with heightened focus on trade edge, public capex and foreign investments, to sustain economic growth amid global trade tensions, uncertain capital flows and geopolitical risks, minister of state for finance Pankaj Chaudhary told Parliament on Monday.

In a written reply in the Lok Sabha, Chaudhary dwelt upon the approach, which includes steps to better integrate India into the global market and bolster its export competitiveness, negotiating trade deals with key nations, further liberalising foreign direct investment policies, continued efforts to reduce compliance burden, boosting local manufacturing and elevated public capex.

He also said the Centre isn’t considering revising its FY26 fiscal deficit target from the budgeted 4.4% of gross domestic product at this stage. “There is no felt requirement for revision of fiscal deficit target at this stage, and neither is it considered appropriate,” he said.

‘Strong macro fundamentals’

Chaudhary underscored that the country is on a strong footing to tide over external shocks. “India’s economic resilience is underpinned by strong macroeconomic fundamentals such as steady growth, price stability, credible fiscal consolidation, resilient external sector performance, robust foreign exchange reserves, a strong and well-capitalised banking sector, and robust physical and digital infrastructure,” the minister said.

Moreover, India’s well-regulated financial system, credible inflation-targeting regime and flexible exchange rate contribute to the economy’s resilience to shocks, Chaudhary added.

The International Monetary Fund expects India to remain the world’s fastest-growing major economy over the next two years, with rates of expansion forecast at 6.2% for FY26 and 6.3% for FY27, more than double the global averages.