What began as a once-in-a-century public health emergency had swiftly transformed into an unprecedented humanitarian and economic crisis. Countries across the world had to navigate fragile recoveries after prolonged lockdowns, disrupted supply chains, subdued consumer demand, and strained public finances. In the aftermath of the pandemic, a series of severe supply-side shocks, most notably the war in Ukraine, the tariff-induced uncertainties, and the conflict in West Asia, have disrupted global production networks, logistics systems, and labor markets. Each shock arrived before the wounds of the previous had fully healed. And yet through each crisis, India has not merely survived — it has in fact emerged remarkably and measurably stronger. We are in the midst of another crisis with the impact of the war in the Gulf. In this background, I have chosen to speak on the theme: Turning Turbulence into Triumph — India's Journey Through Crisis. I propose to reflect on some of the crucial learnings from our experience, especially in the last few years, how we have navigated the multiple crises starting with COVID-19. I would like to highlight some of the crucial learnings from our experience in the recent years and how it offers valuable insights for enhancing resilience in an increasingly volatile and fragmented world.
Today, the global economy is navigating a highly unsettled and charged environment marked by geopolitical fragmentation, shifting supply chains, and uneven regional growth. Multilateral institutions such as the International Monetary Fund — the IMF — have repeatedly warned that the balance of risks to the global growth outlook remains decisively skewed to the downside. These vulnerabilities are further intensified by the prospect of tightening financial conditions, as elevated public debt and widening fiscal deficits constrain policy space in several major economies. In fact, they carry the potential for future financial shocks. In the face of global volatility, India has displayed remarkable resilience, with its real GDP growing by 7.6% in the financial year we just concluded — that is, financial year 2025-26. I would like to stress that India's resilience does not alone explain the full story. In the last five years since COVID-19, India did not just endure the period of turbulence — it transformed through it.
The country witnessed deep digitalization across sectors, efficiency gains in government systems, and unprecedented expansion in infrastructure. From 2021-22 to 2025-26, India has recorded an average annual real GDP growth of 7.8%, reflecting economic resilience and resurgence. The question that merits an answer at this stage is: what are the key factors behind this growth story of the Indian economy? Let me elaborate.
First, macroeconomic stability. India has maintained strong growth, unwavering management of inflation, and large foreign exchange reserves, making it well-equipped to absorb global shocks. Second — and I'm going to highlight ten points, so I need your patience — first was macroeconomic stability. Second, policy stability. Stable governance and broad policy focus on growth and reforms have given confidence to investors and businesses. Third, infrastructure-led development. Sustained public investment in roads, ports, railways, energy, and digital systems has strengthened supply chains and reduced structural bottlenecks. Fourth, strong domestic demand. With a median age of 29 years and a rapidly urbanizing population, India's consumption base provides a natural buffer unavailable to many export-dependent peers. India's consumer spending accounts for over 55% of its GDP.
Fifth, monetary policy credibility — an issue which is very close to my heart. The Reserve Bank's inflation targeting framework allows the policy rate to respond flexibly. Cutting repo rates — that is, interest rates, what you call in popular parlance — cutting repo rates when growth is threatened, and tightening repo rates when inflation surges, and all this is done with big emphasis on not sacrificing long-term market confidence and growth. The GDP growth of 7.1% in 2024-25 bears testimony to this, and in fact completely demolishes the narrative in certain quarters at that time that the Reserve Bank's monetary policy has resulted in growth slowdown. Continuity in this flexible monetary policy framework for the next five years — that is, till 2031 — reaffirms the commitment to price stability while keeping in mind the objective of growth.
Now, many people often have asked me: why is inflation management so important? You see, inflation, if it remains at a stable level, gives big confidence to investors as well as markets. Many economists have described inflation as a tax on the poor, because the biggest sufferers if inflation is high are the poor people. And one more thing which is very important is that low inflation would mean increasing the spending power — the real money — in the hands of the consumer. Therefore, inflation control is in the overall interest of the economy, in the interest of industry, in the interest of investors, and above all, in the interest of the people.
Sixth, digital public infrastructure. UPI — about which already mention has been made by the Honorable Minister — UPI, Aadhaar, ONDC, and progressive formalization of the economy through multiple measures have expanded financial inclusion and improved fiscal revenue and monetary policy transmission. Thus, each crisis in recent years has become a catalyst for structural deepening.
Seventh, fiscal discipline. Despite extraordinary spending pressures, especially during the COVID-19 pandemic, India has adhered to a credible path of fiscal consolidation. A credible fiscal framework is not just an accounting exercise — it is the bedrock of national resilience. A defining feature of this fiscal consolidation in India has been the marked improvement in the quality of our public expenditure, with a sharp rise in the share of capital expenditure within the total spending of the government.
Eighth, resilient financial system. The banking and the NBFC — that is, non-banking financial companies — sector emerged stronger in the aftermath of the pandemic than when the pandemic began, thanks to the efforts of the regulator and other stakeholders. Ninth, young and enterprising demography. The young and skilled demographic profile of India is a powerful economic advantage, driven by a large working-age population, rising educational attainment, and expanding digital capabilities. Coupled with enterprising energy, this workforce will continue to boost productivity, innovation, and inclusive growth in the years to come.
Tenth and last — there's a final point — geopolitical positioning. India's strategic autonomy and diversified partnerships reduce overdependence on any single country or group of countries. We take decisions in our best national interest. Now, these features of the Indian economy enable us to face recurring global shocks, as we have seen in the last few years. These features also enable the economy to emerge even stronger after each crisis.
As I proceed to conclude, let me also share certain thoughts with you on the way forward for Indian businesses and managements at the current critical juncture. These are primarily in the nature of certain suggestions. I repeat, these are primarily in the nature of certain suggestions which are for you to consider, and possibly, if you find merit, to also adopt at moments like this when the whole world is experiencing unprecedented volatility. It would be appropriate and, in my opinion, very prudent for Indian industry and business to — and I will list out a few points — to: number one, build organizational resilience; two, strengthen balance sheets; three, build new supply chains; four, protect jobs; five, reskill the available manpower; six, diversify into new markets, especially for the exporters; and seven, invest strategically for future readiness and for capitalizing on new opportunities. These measures, I feel, will go a long way in building sustainability and future growth of Indian business and industry.
India is now seen as a safe anchor. I repeat, India is now seen as a safe anchor because it offers stability, predictability, and prospects of long-term growth at a time when much of the world is marked by conflict, volatility, and policy uncertainty. Given the inherent strength of the Indian economy, the cumulative scorecard of this decade is already striking. But the more consequential story is what lies ahead. The growth levers for the next decade are not just aspirational — they are in fact already in motion and gaining momentum. A young and rapidly urbanizing population is driving a consumption wave that will power domestic demand for decades. The high level of government capital expenditure program is compounding infrastructure depth in roads, railways, ports, and digital connectivity. The PLI scheme is seeding a manufacturing base across 14 high-value sectors. India's digital public infrastructure continues to formalize the economy, broaden the tax base, and deepen financial inclusion at scale.
Services exports, anchored in one of the world's largest technology and professional service industries, provide an engine for resilient external earnings. Taken together, these are not cyclical tailwinds — they are structural, compounding, and durable. India does not merely march towards becoming a developed economy by 2047 — it marches with its foundations already laid, its institutions tested, and its growth trajectory increasingly difficult to reverse. India's credibility as a rules-based, reform-oriented economy with strong institutions, policy continuity, and demographic and democratic accountability reinforce investor confidence and social stability. These strengths allow India not just to absorb global shocks but to convert disruption into opportunity. Even with all the turbulence around the world, India will find a way to triumph and emerge stronger.
