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India must fire on all cylinders—focusing on domestic demand, reforms, investment, innovation, and trade integration—to sustain high growth
IMF
India must fire on all cylinders—focusing on domestic demand, reforms, investment, innovation, and trade integration—to sustain high growth and meet its long-term development goals, Krishna Srinivasan, Director of the Asia and Pacific Department (APD) at the International Monetary Fund (IMF), said on Thursday.
Responding to a question on India’s approach to tariffs and self-reliance, Srinivasan told the news outlet, “If India has to grow at the rate at which you’re talking about in terms of being fixed by 2047, India has to fire all cylinders. Strengthen domestic demands, build internal integration within India… But also, there is an opportunity here for India to integrate itself in global supply chains.”
He noted that India’s recent reforms, including the Goods and Services Tax (GST), are helping boost domestic consumption. “The GST reforms go in that direction, which will provide lift to consumption and improve domestic demand,” he said.
Srinivasan emphasised that India needed to strike a balance between domestic growth and global trade opportunities. He noted that several steps were required to achieve this, including greater trade liberalisation and more flexible labour laws to help industries scale up and compete globally, particularly with China. He further pointed out that improving the business environment was essential, as numerous regulations continued to hinder the private sector’s ability to realise its full potential.
On India’s economic performance, Srinivasan said growth remains strong despite global headwinds. “India continues to be the fastest-growing major economy. We have India growing at 6.6% this year, slowing to 6.2% next year, and that slowdown is because of the higher tiers of tariffs. If you look at India’s fundamentals, they’re pretty strong. Growth is good, inflation’s coming down, and the fiscal deficit is well managed,” he said.
He further noted that India should not view domestic self-reliance and global trade engagement as mutually exclusive. “In my view, it’s not one or the other. It needs all cylinders if you want to get to 8% or more growth and meet your objective of Viksit Bharat,” Srinivasan said.
On the broader Asia-Pacific outlook, the IMF official said economic activity in the region is holding up better than expected. “We project the region to grow by 4.5% in 2025 and moderate to 4.1% in 2026. The region is once again set to contribute the lion’s share of global growth—about 60% both this year and in 2026,” he said.
Strong exports, a technology boom, and supportive macroeconomic policies are helping the region remain resilient. Srinivasan added that deeper regional and global integration could unlock substantial long-term benefits. “Concerted efforts to pursue reforms to boost trade and investment will help fuel durable growth for years to come… Countries can cut non-tariff barriers, broaden and modernize trade agreements to cover services and digital trade, and ease FDI restrictions,” he said, underscoring the IMF’s view that structural reforms are key to sustaining inclusive growth.
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More
October 17, 2025, 09:53 IST
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