“Uncertainties stemming from global developments constitute a key risk for the growth outlook for fiscal year 2025-26,” the ministry said.
The perception of prolonged uncertainty could lead private companies to delay investment plans, the report, prepared by the ministry’s chief economic adviser, cautioned.
Geopolitical risks and trade tensions are a challenge to India’s FY26 growth, potentially disrupting supply chains and raising prices, the Finance Ministry said.
The perception of prolonged uncertainty could lead private firms to delay investment plans, it noted.
It urged such firms and policymakers to be alert to the growing risks and ‘act urgently’ to prevent uncertainty from feeding on itself.
The industrial outlook survey highlights improved production, stronger order books and better capacity utilisation. Similarly, the quarterly order books, inventories and capacity utilisation survey shows enhanced utilisation levels in the third quarter (Q3) of the last fiscal, signalling strengthening demand and industrial recovery.
Inflationary pressures softened in March and the domestic financial sector is showing resilience amid global uncertainty, it noted. Overall, India’s external sector remains resilient as key indicators stay robust.
Private companies and policymakers must remain alert to the growing risks and ‘act urgently’ to prevent uncertainty from feeding on itself, said the report.
The government’s projected path for reducing public debt would help boost the pool of domestic savings available for private investment, thereby supporting economic growth.
“In contrast to normal times, action and execution have greater impacts now. It is an opportunity not to be missed,” it added.
Fibre2Fashion News Desk (DS)
