India Promises Strong Growth and Stability for Long-Term Investors: RBI Governor

Amid global economic uncertainties, particularly due to tariff-related risks, Reserve Bank of India (RBI) Governor Sanjay Malhotra emphasized that India continues to offer strong growth and stability, making it an attractive destination for investors seeking long-term value and opportunity. In his address at the US-India Economic Forum, organized by the Confederation of Indian Industry (CII) and US India Strategic Partnership Forum (USISPF) in Washington DC on April 25, Malhotra outlined the key factors that contribute to India’s economic resilience and appeal.

India, according to the Governor, is an economy supported by key pillars of stability: monetary, financial, and political. These pillars, combined with policy consistency, certainty, and a conducive business environment, ensure that India remains a safe haven for investors despite the challenges faced by other major economies. “At a time when many advanced economies are facing economic headwinds and a deteriorating economic outlook, India continues to offer strong growth and stability, making it a natural choice for investors seeking long-term value and opportunity,” Malhotra stated.

One of the significant advantages India offers is its strong domestic demand, which constitutes approximately 90% of its GDP. This reliance on domestic demand, coupled with lower dependence on exports, acts as a cushion against external economic shocks. The Governor pointed out that merchandise exports contribute only around 12% to India’s GDP, a much lower figure compared to many of its global peers. This relative insulation from global market fluctuations allows the Indian economy to continue growing even when external conditions are volatile.

In terms of policy and governance, Malhotra highlighted India’s transparent, rule-based, and forward-looking ecosystem, making it an ideal environment for long-term, productive investments. India’s financial markets, with their seamless entry and exit mechanisms for foreign investors, reflect the maturity of its economy and the country’s increasing integration into the global economic framework.

Furthermore, the Governor stressed that India’s banking sector is in a strong position to meet the financial needs of both society and industry. With healthy balance sheets, strong profitability, lower non-performing assets, and adequate capital buffers, India’s banks are well-equipped to support continued economic growth and provide financing for key investments.

Despite the global economic volatility, India’s growth trajectory remains strong. Over the past four years (2021-22 to 2024-25), the Indian economy has demonstrated remarkable resilience, with an average annual growth rate of 8.2%. For the current fiscal year (FY2026), Malhotra projects a growth rate of 6.5%, which, while lower than in recent years, still represents one of the highest growth rates among major economies. This forecast comes amid increased uncertainty and volatility in global financial markets, with risks of a global growth slowdown and trade wars exacerbated by US President Donald Trump’s announcement of reciprocal tariffs on America’s major trading partners earlier this year.

Malhotra acknowledged that two major international agencies, the World Bank and the International Monetary Fund (IMF), have recently revised their growth projections for India. The World Bank has reduced its forecast by 0.4 percentage points, from 6.7% to 6.3%, while the IMF has lowered its estimate by 0.3 percentage points, from 6.5% to 6.2%. Despite these adjustments, India’s growth outlook remains robust compared to its global counterparts.

In conclusion, Malhotra urged global investors to collaborate with India, highlighting the country’s role not only as a destination for investment but also as a partner in prosperity. India’s stable economic environment, coupled with its robust growth potential, makes it an attractive proposition for those looking to invest for the long term, even in the face of global uncertainties.