As world economies implement their China+1 strategy to diversify, India, with an average GDP growth of six to six-and-a-half percent over the last 12 years, is securing itself by engaging in multiple trade agreements with advanced economies, according to HSBC’s Chief India Economist Pranjul Bhandari. Bhandari emphasized the importance of sustainable growth for India’s potential, highlighting the opportunities arising from increased foreign direct investment (FDI) and enhanced manufacturing and exports resulting from these trade deals.
In light of the current year’s challenges, including supply and energy shocks, Bhandari warned of a potential El Nino climate shock in the coming months. She noted that the combination of these shocks could hinder rapid economic growth not only for India but for countries globally, necessitating a cautious approach to growth forecasts. Despite the challenges, Bhandari projected a six percent growth rate for India in FY27, anticipating a period of moderation in growth due to the ongoing shocks.
Highlighting India’s proactive approach, Bhandari mentioned the recent signing of various trade agreements as a positive indication of the country’s commitment to trade diversification and growth. She stressed the significance of these agreements in the current global scenario, where countries are seeking new trade partners and production locations beyond China.
