India's Growth Path Threatened by FTA Delays with the US

India's projected GDP growth of 6.8-7.2% for FY27 is promising, but delays in finalizing a Free Trade Agreement with the US could pose risks. Economist Rumki Majumdar stresses the importance of domestic momentum and resilience, while highlighting potential challenges such as currency depreciation and strategic self-reliance.

India's projected economic growth for FY27, estimated at 6.8-7.2% by the Economic Survey, appears attainable due to the country's resilience. However, delays in finalizing a Free Trade Agreement (FTA) with the US could threaten this optimistic outlook, according to Deloitte India Economist Rumki Majumdar.

Majumdar indicated that the government's growth projections surpass those of international organizations like the IMF and World Bank, citing India's robust domestic demand, public investment, and policy reforms as driving forces behind the confidence in economic stability.

Despite this strength, Majumdar warned that the timing of the FTA with the US is crucial, as the US is a significant trading partner. Additionally, she noted concerns over currency depreciation, which could nullify advantages gained from trade agreements and necessitate strategic self-sufficiency in critical sectors.

(With inputs from agencies.)