India's Chief Economic Adviser V Anantha Nageswaran has debunked reports that India is considering setting up an alternative currency to the US dollar, saying there is no such plan on the cards.
Speaking during an AIMA event on September 10, he also added that even if global trade has been impacted by tariff tensions and geopolitical unease, the Indian economy is more likely to see positive developments than shocks. He reiterated that India's economic foundation is strong.
India's real GDP increased by 7.8% during the first quarter of FY26, fueled by increasing economic activity instead of tamed inflation. Early indicators for July and August show that this trend is being carried forward into the second quarter.
India is the only economy among G20 nations that has maintained strong growth every quarter for the four years since the COVID-19 shock.
Talking of the effect of former US President Trump's tariffs and recent GST reforms, CEA said, "The net effect on Indian economy of Trump's tariffs and the recent GST reforms will be a decrease of 0.2%-0.3% on fiscal year 2026 GDP growth estimates." Present growth estimates for the year are between 6.3% and 6.8%.
Nageswaran credited India's ability to withstand the past decade of reforms consisting of both digital and physical infrastructure improvements coupled with the gradual formalization of small and medium businesses. He emphasized that efforts such as the Insolvency and Bankruptcy Code, the Goods and Services Tax, the Real Estate Regulation Act, and public sector bank consolidation have strengthened the business environment cumulatively.
He also pointed out that recent reforms in tax administration and GST rate adjustments simplified compliance for businesses. "These steps, they said, are not incremental changes but building blocks of growth over the medium term. Their impact is now visible in both output and employment trends."
Nageswaran also quoted India's recent sovereign credit rating upgrade to BBB- from BBB as a testament to growing global confidence in the economic management of the nation.
Sliding borrowing costs are a testimony to this welcome change, with the yield on the 10-year government bond decreasing from 9% to 6.4%, lightening financing for both the government and private sector. He also noted that relatively stable energy prices in the last four years have kept a lid on inflation.
Fiscal prudence is still a policy priority, and Nageswaran assured that the government would be able to achieve its 4.4% fiscal deficit target for the year.
Looking forward, he underscored that competitiveness, innovation, and productivity need to propel the future growth phase. Two top-level committees are formulating proposals under the "Viksit Bharat" mission, aiming at lowering the "cost of being honest" in business activities by simplifying regulations and reducing bureaucratic obstacles.
The CEA emphasized that upcoming reforms should be cooperation between the private sector and government. He called on businesses to make innovation and efficiency their top priorities over protectionist policies, warning that "sustainable growth must come from enlarging the economic pie, not redistributing it."
Citing India's youthful workforce, he said it will need not only work but quality opportunities in a more digital economy. Policymakers and industry players must then square the speeding up of technology adoption with employment creation.
Read also| NDA-backed CP Radhakrishnan Will Be India’s 15th Vice President
