New Delhi: India needs to “fire on all cylinders” by focusing on domestic demand, reforms, investment, innovation, and global trade integration to maintain high economic growth and achieve long-term development goals, said Krishna Srinivasan, Director of the Asia and Pacific Department at the International Monetary Fund (IMF), on Thursday.
Addressing questions on tariffs and self-reliance, Srinivasan highlighted the importance of balancing domestic growth with global trade opportunities. “If India has to grow at the rate envisioned for 2047, it must strengthen domestic demand, improve internal integration, and also integrate into global supply chains,” he said. He noted that recent reforms, such as the Goods and Services Tax (GST), have supported domestic consumption and lifted demand.
Srinivasan stressed that India’s business environment needs further improvement. “Flexible labour laws, greater trade liberalisation, and easing regulatory bottlenecks are crucial for industries to scale up and compete globally, particularly with China,” he said.
On India’s economic performance, the IMF official said growth remains robust despite global challenges. “India continues to be the fastest-growing major economy, with projected growth at 6.6% this year and 6.2% next year. This slowdown is largely due to higher tariffs. India’s fundamentals are strong, inflation is coming down, and fiscal management remains sound,” he noted.
Srinivasan also emphasised that domestic self-reliance and global trade engagement are complementary, not mutually exclusive. “All cylinders must fire to reach 8% or higher growth and achieve the vision of Viksit Bharat,” he said.
Looking at the broader Asia-Pacific region, he said economic activity is holding up better than expected, with growth projected at 4.5% in 2025, moderating to 4.1% in 2026. The region is expected to contribute around 60% of global growth during this period, supported by strong exports, a technology boom, and sound macroeconomic policies.
Srinivasan highlighted that deeper regional and global integration, along with structural reforms such as cutting non-tariff barriers, modernising trade agreements, and easing FDI restrictions, will be key to sustaining inclusive and durable growth for India and the wider Asia-Pacific region.
