India Strongly Positioned to Withstand Global Energy Shocks: World Bank
Strong economic buffers and trade prospects to support growth outlook despite rising global risks
NEW DELHI: India remains well equipped to navigate ongoing global energy disruptions, with the World Bank highlighting the country’s robust economic safeguards as a key strength. According to the institution, strong foreign exchange reserves, available fiscal space, and a stable, well capitalised banking system provide a protective cushion against external uncertainties.
The global lender projected India’s economic growth to average 7.1% during FY28–FY29, reflecting sustained momentum. This outlook follows a recent upward revision in the country’s FY27 growth forecast to 6.6%, indicating confidence in India’s macroeconomic stability.
Aurelien Kruse noted that India entered the current phase of global volatility with solid buffers in place. He emphasised that policymakers have effectively balanced supply-side interventions without resorting to extreme measures such as large-scale rationing. However, he cautioned that global risks remain significant and largely skewed towards the downside.
The World Bank also expressed optimism over India’s recent trade engagements with the European Union and the United Kingdom. These agreements are expected to enhance export opportunities, lower costs, and improve household incomes across various income segments. Officials estimate that such deals could nearly double India’s access to global markets under preferential trade frameworks.
Franziska Ohnsorge pointed out that while South Asian nations have increasingly adopted industrial policies to boost manufacturing and employment, outcomes have varied. She observed that restrictive import measures have curbed inflows, but export-focused strategies have not delivered proportional gains.
Speaking at an event hosted by the National Council of Applied Economic Research, Ohnsorge highlighted the growing challenge of job creation in the region. With nearly 280 million young individuals expected to enter the workforce over the next decade, she stressed the need for policy reforms that encourage the adoption of artificial intelligence, enabling businesses to enhance productivity and generate employment opportunities.
