The International Monetary Fund (IMF) has placed India at the center of the global economic growth story. IMF Managing Director Kristalina Georgieva described India as a “key growth engine” at a time when the world is still grappling with trade tensions and economic challenges.
Georgieva said ahead of the annual meetings of the IMF and World Bank, “Global growth patterns have been shifting for years, particularly with China slowing down, while India is emerging as an important growth engine.”
This statement comes as global markets are reacting to trade tariffs imposed by US President Donald Trump. Despite these policies, the IMF chief said the global economy is performing better than expected, although there is still room for improvement. “The global economy is performing better than expected, but worse than it should be,” she said.
She noted the unexpected strength of major economies like the US and India. According to Georgieva, “Growth is expected to decelerate slightly this year and next year.” He further said that “all signs point to a world economy that has successfully weathered the severe stresses imposed by multiple shocks.”
This stability was attributed to a “better policy foundation,” the private sector’s adaptability, and “lower-than-expected tariffs.” In a cautious reassurance, she said, “The world has so far avoided a tit-for-tat trade war.”
The IMF assessment comes amid rising tensions over Trump’s tariff regime. The US recently imposed a 50 percent import duty on India, targeting India’s subsidized oil purchases from Russia. Washington has accused India and China of “financing” Russia’s war against Ukraine, while New Delhi maintains that its decisions are based on national interest and market pricing.
Georgieva attempted to allay fears of a global economic slowdown. “The full impact of those tariffs is yet to be revealed. Global resilience has not yet been fully tested,” she said. He also pointed out that the US tariff rate has declined from 23 percent in April to 17.5 percent currently, but it remains “much higher than the rest of the world.”
Meanwhile, India has dismissed concerns about Washington’s tariff shock. Finance Minister Nirmala Sitharaman has said that the country’s economic fundamentals are strong and growth is continuing at a steady pace. “The Indian economy is resilient and growing sustainably,” she said last week. She stressed that external shocks will have only a limited impact on India’s economic momentum.
Data also supports this claim. India recorded real GDP growth of 7.8 percent in the first quarter of fiscal year 2025-26, significantly higher than the Reserve Bank of India’s estimate of 6.5 percent. Economists attribute this surge to strong consumer spending, higher investment flows, and the recent cut in GST rates, which boosted demand.
The IMF chief’s recognition of India’s economic strength further strengthens the country’s growing influence in global economic policy discussions. As IMF meetings begin in Washington, all eyes are on whether India can maintain its momentum and help stabilize a fragile global recovery amid Trump’s trade turmoil.
