Finance Ministry Says India’s Economy Resilient Despite Tariff Pressures

India’s economy remains resilient despite near-term risks from US tariffs and global trade uncertainties, according to the Finance Ministry’s Monthly Economic Review for July 2025.

The report noted that strong macroeconomic fundamentals, including a recent sovereign rating upgrade by S&P to “BBB,” are helping India withstand external shocks. It highlighted government reforms such as the Task Force for Next-Generation Reforms, upcoming GST changes, and state deregulation measures as key drivers to attract capital, reduce borrowing costs, and boost investment.

Economic indicators remain robust: record e-way bill generation, a 16-month high in manufacturing PMI, and strong services growth. FMCG sales, UPI transactions, and vehicle sales reflect healthy rural and urban demand, supported by a good monsoon.

Exports rose 4.5% in July, led by a 12.7% jump in core merchandise exports. Foreign exchange reserves stood at $695.1 billion on August 8, providing over 11 months of import cover.

The review added that India’s calibrated trade strategy, including recent pacts with the UK and EFTA, aims to expand market access while safeguarding domestic interests.