Washington: The Worldwide Financial Fund (IMF) has positioned India on the coronary heart of the worldwide development story. IMF Managing Director Kristalina Georgieva described the nation as a “key development engine” in a world nonetheless navigating the turbulence of Trump-era tariffs and financial headwinds.
“International development patterns have been altering through the years, notably with China decelerating steadily whereas India develops right into a key development engine,” she stated forward of the IMF and World Financial institution annual conferences in Washington subsequent week.
Her remarks got here as world markets react to sweeping tariffs launched by US President Donald Trump on April 2. Regardless of the coverage shock, the IMF chief stated the worldwide financial system is holding agency. “The worldwide financial system is doing higher than feared, however worse than we want,” she stated throughout a keynote session on the Milken Institute.
Georgieva pointed to the surprising power of main economies, together with the US and India. “Progress is anticipated to sluggish solely barely this yr and subsequent,” she stated, including that “all indicators level to a world financial system that has usually withstood acute strains from a number of shocks”.
She credited the relative stability to “improved coverage fundamentals”, non-public sector adaptability and “lower-than-expected tariffs”.
In a cautious reassurance, she highlighted, “The world has to this point averted a tit-for-tat slide into commerce battle.”
Tariffs And Tensions
The IMF’s evaluation comes amid rising friction over Trump’s tariff regime. On April 2, the US imposed new commerce limitations, together with a 50 % obligation on Indian imports, half of it concentrating on India’s discounted oil purchases from Russia.
Washington has accused India and China of “funding” Moscow’s battle towards Ukraine. New Delhi has maintained that its choices are based mostly on nationwide curiosity and market pricing.
Georgieva appeared to minimize fears of a world financial spiral. “The complete impact of these tariffs continues to be to unfold. International resilience has not to this point been totally examined,” she stated.
She added that the US tariff fee, although down from 23 % in April to 17.5 % in the present day, stays “far above the remainder of the world”.
India’s Progress Momentum
In the meantime, India has disregarded issues about Washington’s tariff blow. Finance Minister Nirmala Sitharaman stated the nation’s fundamentals stay robust and development continues at a sustainable tempo.
“The Indian financial system is resilient and continues to develop sustainably,” she stated final week, highlighting that exterior shocks would have solely a restricted impact on India’s financial momentum.
The numbers again that declare. India recorded an actual GDP development of seven.8 % in Q1 of FY 2025-26, surpassing the Reserve Financial institution of India’s 6.5 % projection. Economists attribute the surge to strong shopper spending, increased funding flows and a current lower in GST charges that boosted demand.
Georgieva’s recognition of India’s financial power provides weight to the nation’s rising affect in world financial coverage discussions. Because the IMF conferences start in Washington, all eyes at the moment are on whether or not India can maintain its tempo and assist regular a fragile world restoration amid Trump’s commerce turbulence.