Domestic Demand: India’s Shield Against Tariff Wars
Madan Sabnavis, Chief Economist at Bank of Baroda, highlighted India’s robust domestic consumption as a crucial buffer against the impact of recently imposed reciprocal tariffs. He emphasized this internal strength as a key factor in navigating the current global economic uncertainty.
This strong reliance on domestic demand, Sabnavis explained, lessens the vulnerability of the Indian economy to external shocks, such as retaliatory trade measures. The country’s large and growing consumer base provides a stable foundation for economic growth.
The assertion comes amidst growing global concerns about trade tensions and their potential impact on developing economies. India’s position, according to Sabnavis, showcases a strategic advantage.
This resilience, however, is not without its challenges. Maintaining this strong domestic demand requires continued focus on inclusive growth and infrastructure development to support consumption.
The observation underscores the importance of balanced economic policies that promote both domestic consumption and export diversification for long-term economic stability and growth in the face of unpredictable global trade dynamics. India’s focus should now be on nurturing this strength to further mitigate future external risks.
