Daijiworld Media Network - New Delhi
New Delhi, Jul 27: The Indian economy is projected to grow at a strong pace of over 6.5% in the current financial year without facing major challenges, said Nagesh Kumar, a member of the RBI’s Monetary Policy Committee (MPC), on Sunday.
In an interview with PTI Videos, Kumar said India continues to be a "bright spot" amid a global economic slowdown, as over one-third of the world’s economies are under debt stress and facing high inflation. “India’s growth is largely driven by domestic consumption and investment rather than exports, which insulates it from global headwinds,” he noted.
The economy is estimated to have grown at 6.5% in the previous fiscal, and the Reserve Bank of India expects similar growth this year as well. Kumar said, “There’s no reason why the economy cannot maintain or even exceed 6.5% growth in the current and following years. Eventually, the momentum should take us to 7–7.5% growth.”
On inflation, he said the CPI is currently around 2%, crediting the MPC’s policy decisions. However, he warned that a single month’s low number is not enough to determine the overall trend. “MPC will consider broader macroeconomic indicators before deciding on further rate cuts,” he said. The RBI is set to announce its next policy in August.
Regarding the proposed Bilateral Trade Agreement (BTA) with the US, Kumar said it could open access to the vast American market, especially in labour-intensive sectors where India holds an edge. He acknowledged India's concerns about liberalising its agriculture and dairy sectors but suggested there are ways to balance interests through quotas and phased concessions.
On the FDI front, Kumar said India saw an increase in gross FDI from $71 billion to $81 billion in FY25. “Net inflows may appear lower due to repatriation, but what matters is that gross inflows are growing. India will continue to attract foreign investments thanks to its robust economic performance,” he added.
According to the latest UNCTAD World Investment Report, global FDI fell by 11% to $1.5 trillion in 2024, but India continues to stand out with strong investor confidence and policy stability.