Mumbai, Apr 22 (PTI) India is poised to benefit from supply chain realignments, diversified FDI sources, and engagement with global investors seeking resilience and scale, given its already established trade linkages, said the RBI’s April bulletin.

Moreover, India’s consistent strength in services exports and remittance inflows continues to provide a vital buffer for the current account, said an article on ‘State of the Economy’ in the bulletin.

“Calibrated policy support can help India turn global volatility into an opportunity and strengthen its position in the emerging world economic landscape,” it said.

It also noted that escalation of trade and tariff tensions and the resultant financial market volatility have raised concerns regarding the weakening of global growth in the near term.

“Although the dampening global economic outlook could impact India’s economic growth through weaker external demand, the domestic growth engines, viz., consumption and investment, are relatively less susceptible to external headwinds,” the article said.

Prospects for the farm sector have been boosted by the forecast of an above normal southwest monsoon for 2025, which could augment farm incomes and keep food prices under check, it noted.

The Reserve Bank of India (RBI), however, said the views expressed in the bulletin article are of the authors and do not represent the views of the central bank.

The Indian economy continues to remain resilient on strong domestic growth impulses and sound macro-fundamentals despite strong global headwinds emanating from trade tensions. Consumers and businesses remain optimistic regarding the economic outlook, the article stated.

High frequency indicators suggest that aggregate demand remained broadly resilient during Q4:2024-25. Indicators such as E-way bills and toll collections recorded robust y-o-y growth in double digits in March 2025, despite a sequential moderation in the latter.

The article futher said that global growth outlook remains downcast, as uncertainty surrounding tariffs and the individual policy responses of different countries could result in lower investments spending, subdued consumer confidence, and a slowdown in global trade.

“The long-term effects of these developments on the course of the global economy remain highly uncertain as there is still no clarity regarding the scope, timing and intensity of tariffs,” the article said.

Going forward, it said global financial conditions are likely to remain volatile and EMEs are vulnerable to feedback loops and spillovers which may lead to reigniting of global inflation.

Decline in global commodity prices, however, could ease pressure on inflation in commodity importing countries, although currency pressures could partly offset such benefits.

“India’s strength to withstand these headwinds stem from its robust growth fostered by a strong macroeconomic framework and moderating inflation, with strong domestic engines of growth,” the article said.

The agricultural sector in India is poised to sustain its momentum, supported by bumper kharif and rabi harvest and higher summer sowing amidst comfortable reservoir position.

Risks emanating from the rise in temperature above normal levels and likelihood of heatwaves in the current summer season (April – June), however, needs to be monitored, it added. PTI NKD CS MR