 "India's economic reset underway but clock is ticking: Experts at BS Manthan")
India’s economic cycles are now more aligned with global trends, driven by increased trade, stronger financial linkages, and deeper integration into the world economy, said Dharmakirti Joshi, chief economist, Crisil, on Thursday.
He was speaking at a panel discussion, themed ‘India’s economic reset amid a new world order’ at the two-day BS Manthan summit in New Delhi. Speaking on India’s economic journey, Joshi said, “Over the past 40 years, India’s economic trajectory has followed a distinct path compared to advanced economies.”
He highlighted two standout patterns: global synchronisation — where India’s economic cycles now mirror global ones due to tighter trade and financial ties, and growth divergence – with India trending upward while advanced nations slump. “This is due to strategic domestic interventions that have boosted the country’s potential growth rate,” he explained, adding, “India has the ability to accelerate even further” with the right policies. Joshi pegged next year’s growth at 6.5 per cent, a return to the pre-pandemic rate, but stressed that reforms could push it higher.
Joshi also cautioned that food inflation — tied to unpredictable climate shifts — remains a wildcard. “You can’t bring food inflation down very quickly,” he said.
India’s internal strength
Laveesh Bhandari, president CSEP, economist, entrepreneur, and environment evangelist, argued that India’s global rise hinges on fixing its internal machinery. “We have to be internally strong,” he urged. “Internal strength essentially means a strong capacity within the state.” He also called for parallel Free Trade Agreements (FTAs) with multiple countries, tailored to India’s needs. Separately, he also flagged a glaring weak spot: the judiciary. “Is our judiciary equipped to ensure that contract promises are kept? Certainly not,” he opined.
Bhandari asserted, “All that can go for India is going for it — yet investors are not investing.” Suggesting measures to fix this, he said, “Bolster regulators, overhaul primary education, and rethink deregulation. The 2047 dream will be gone if we don’t get our primary education right.” Bhandari also slammed the under-resourced regulatory agencies and poor coordination. He said, “Most regulatory entities in India are under-resourced. We need to invest in them. Besides, regulators in India rarely talk to each other. They need better coordination.”
‘All sectors need to perform’
Tushar Vikram, CEO & Country Head India, Mashreq, brought an international angle to the discussion mentioning India’s deepening ties with the United Arab Emirates (UAE). “The Comprehensive Economic Partnership treaty signed between India and UAE in 2022 has led to increased business cooperation,” he said. “With UAE as India’s third-largest trade partner, it is also a gateway to Africa and a hub for Indian exports. UAE is looking at food security, health security — all this is critical to India as well,” he said, highlighting how UAE firms are investing in India’s debt and equity markets.
On a separate note, Vikram added, “Private sector should not be limited to a few sectors. We have a very robust private equity market in the country – they have deep pockets. SMEs and unlisted companies are future growth companies. All sectors need to perform for continued growth.”
India’s growth will draw foreign investors
Sundeep Sikka, CEO & MD, Nippon Mutual Fund, turned the lens on India’s financial evolution, crediting the mutual fund industry for channelling household savings into growth. “Just 10 years back, only 0.8 per cent of household savings were coming in from mutual funds. Today’s count is 6 per cent,” he said. Sikka also predicted that India’s fast growth will draw foreign investors — “FIIs will keep taking tactical calls; everyone would want a share in India's growth story.”
But it’s not all rosy, Sikka added. “Something is not going the way we expected in terms of consumption,” he said, noting a rural-urban divide. Still, he expressed optimism about financial education spreading to small towns, a shift he says is “heartening”.
The takeaway: India is trending up while others falter, but seizing its full potential means tackling judicial delays, spurring corporate investment, and ensuring inclusive growth. As Joshi of Crisil put it, “By leveraging the right policy and economic levers, the nation can solidify its position as a global economic powerhouse.” With the world watching, India’s reset is well underway — but the clock is ticking.