India's Growth Forecast Faces Global Headwinds

Economist Arvind Virmani revises India's GDP growth projection for FY'25 to 6.5-7% amid global uncertainties. Factors like US elections and China's slowdown impact projections. Despite challenges, Virmani is optimistic about India's long-term growth potential, urging improved investment climates across states.

NITI Aayog member and eminent economist Arvind Virmani has adjusted his GDP growth forecast for India for the fiscal year 2025. Initially set between 6.5-7.5%, the projection is now lowered to 6.5-7% due to prevailing global uncertainties, particularly centering around the United States and China.

Virmani cites heightened political uncertainties in the US, notably from upcoming elections, as a significant influencing factor. These ripple effects, he argues, are also impacting Europe and China, thus indirectly affecting India. He also criticizes China's excessive capacity-building measures amidst its economic slowdown, which he believes exacerbate global risk aversion.

Despite these challenges, Virmani is optimistic about India's long-term economic prospects. He emphasizes the importance of sustaining a 6% growth rate over the next 25 years, potentially elevating India to a higher income bracket comparable to China. He also stresses the need for improved investment climates across Indian states.