The Ministry of Finance has raised concerns that India’s economic growth for the fiscal year 2025-26 could face challenges due to rising trade tensions and global political risks. These factors may disrupt international supply chains, raise import costs, and create uncertainty in business decisions.
In its latest monthly report, the ministry explained that worldwide conflicts and unstable trade relations are key risks that could slow economic progress.
Private Investment Plans Could Get Delayed
The report noted that when uncertainty remains high, private companies may choose to postpone investments. This could reduce the pace of economic development.
“When global situations are unclear, businesses tend to wait and watch. This delay affects overall growth,” the ministry stated.
IMF Lowers India’s Growth Projection
Recently, the International Monetary Fund (IMF) adjusted its forecast for India’s GDP growth for FY 2025-26. It now expects the economy to grow at 6.2%, lower than the 6.5% forecast made earlier in January. This cut reflects fears over weaker global demand and higher trade barriers.
Quick Policy Action Is the Need of the Hour
To avoid long-term damage, the government has urged both industry leaders and policymakers to act quickly. Strong and timely measures can help reduce uncertainty and keep the economy moving.
Additionally, the government’s continued push to lower public debt will increase domestic savings. As a result, this will make more money available for private sector growth.
“This is not a normal time. Taking fast and smart actions now can create a bigger positive impact than usual,” the ministry highlighted.
