India’s economy will be ‘among fastest-growing in 2023’
India’s economy will be among fastest-growing ones in the world in 2023, with an expected growth rate of 6.5% in the current fiscal year.
That’s the view of Reserve Bank of India (RBI) Governor Shaktikanta Das, who said: “We expect real GDP to grow by 6.5% during 2023-24. In all likelihood, India will remain among the fastest growing large economies in 2023.” Das made the comments while delivering the opening address at the Summer Meetings organised by Central Banking in London, where he was named ‘Governor of the Year’.
He said that the Indian economy had displayed “exemplary resilience” in the post-pandemic period, bouncing back strongly from a contraction of 5.8% in 2020-21 to growth of 9.1% in 2021-22 and 7.2% in 2022-23, with a “coordinated response of fiscal and monetary policies nurturing a quick recovery”.
He said that structural reforms to India’s economy – relating to banking, digitalisation, taxation, manufacturing and labour – introduced since the pandemic had laid the foundations for strong and sustainable growth over the medium and long term.
“The government’s continued thrust on capital expenditure is creating additional capacity and nurturing the much-awaited revival in the corporate investment,” the Governor said.
He added that the Indian economy is now much better integrated with the global economy. “Consequently, it is getting increasingly exposed to the vagaries of global headwinds. It is, however, pertinent to note that India’s growth in the last few years is mainly driven by robust domestic demand, especially private consumption and investment, amidst the global slowdown.”
The RBI Governor said that acting quickly and decisively during the crisis gave India the ability to respond to developments. “In this regard, our decisions at the height of the coronavirus crisis in 2020 and our liquidity rebalancing measures in 2021 served us well. Second, our measures have been prudent, targeted and calibrated to the need of the hour.
“We have not been tied down by any existing dogma or orthodoxy. While lowering the floor of the interest rate corridor and increasing its width, we did not inject excessive liquidity or dilute our collateral standards. We kept in mind that what is being rolled out needs to be rolled back in time and in a non-disruptive manner,” he said.
“Third, we backed up our monetary policy actions by appropriate regulatory and supervisory measures, including macro-prudential instruments, that reinforced the policy impact and its credibility.
“Fourth, we provided guidance and confidence to the market and the wider public through effective communication as part of our endeavour to anchor expectations and sentiments appropriately. Thus, communication became an additional pillar of our overall policy response during the pandemic,” Das said.
Trade agreement boosts India’s trade with the UAE
Figures from the UAE Ministry of Economy show that in the first 12 months of the Comprehensive Economic Partnership Agreement (CEPA) trade deal with India, bilateral non-oil trade reached $50.5 billion, a 5.8% increase on the same period from the previous year.
Coming into force on 1 May 2022, the UAE-India CEPA was the UAE’s first-ever bilateral trade deal. The agreement cut or completely scrapped tariffs on more than 80% of products, created new platforms for SME collaboration and promoted mutual investment flows.
Piyush Goyal, Indian Minister of Commerce and Industry, said the UAE-India CEPA had played “a prominent role in consolidating economic and trade relations, driving further growth and prosperity and creating new opportunities and enablers for the private sector”.
The minister also reviewed a number of economic initiatives, which will enhance the prospects for investment cooperation between India and the UAE by taking advantage of the promising investment opportunities in the markets of the two countries.
