India ‘offers strong growth and stability’, says RBI Governor

India offers strong growth and stability for investors looking for long-term value, Reserve Bank of India (RBI) Governor Sanjay Malhotra has said.

He said the country continues to be an economy supported by stability, pointing to monetary, financial and political policies; a flexible and supportive business environment; and strong macroeconomic fundamentals.

The Governor said: “At a time when many advanced economies are facing economic headwinds and a deteriorating economic outlook, India continues to offer strong growth and stability making it a natural choice for investors seeking long term value and opportunity.”

Malhotra, speaking in Washington DC at the recent US-India Economic Forum, organised by Confederation of Indian Industry (CII) and US India Strategic Partnership Forum (USISPF), added: “Our strong domestic demand and relatively lower dependence on exports cushions the Indian economy from external spillovers.”

India’s domestic demand contributes about 90% to GDP, whereas merchandise exports contribute about 12% of GDP, which is much lower compared with countries with similar economies.

The Governor highlighted that India offers a policy ecosystem that is transparent, rule-based and forward-looking —ideal conditions for long-term and productive investments.

“As the world’s fastest-growing major economy, India is not just a destination for investment – it is a partner in prosperity,” he said, while asking global investors to collaborate and invest in India.

The country’s financial markets offer seamless entry and exit for foreign investors, reflecting the maturity of its economy, he added.

Malhotra said the country’s banking sector, with its healthy balance sheet, strong profitability, lower non-performing assets and adequate capital buffers is poised to meet organisations’ investment needs.

He said that the Indian economy has seen an average annual growth rate of 8.2% over the past four years (2021-22 to 2024-25).

“Even this year (FY2026), our growth is expected to remain robust at 6.5%. This is despite the tremendous increase in uncertainty and volatility in global financial markets. While this rate is lower than in recent years and falls short of India’s aspirations, it remains broadly in line with past trends and the highest among major economies,” the Governor said.

US – China tariffs ‘could have implications for India’

Worsening trade ties between the United States and China have raised hopes of more US-bound orders shifting to India, with China’s Ministry of Commerce saying it is “evaluating” the possibility of initiating tariff negotiations with the US.

“China has noticed that the senior leadership of the United States has repeatedly stated that it is willing to negotiate with China on tariff issues. At the same time, the United States has recently taken the initiative to convey information to China through relevant parties, hoping to talk to China. In this regard, China is evaluating it,” the Ministry said in a statement.

This comes as Indian exporters have started receiving more orders and inquiries from US clients, amid elevated tariffs on Chinese goods.

Indian exporters told The Indian Express that the availability of shipping containers — which had been a constraint — is beginning to improve due to the cancellation of several Chinese shipments to the US. However, any return to normality between the US and China could slow the shift in business towards India.

Ajay Sahai, Director General and CEO of the Federation of Indian Export Organisations (FIEO), said several Chinese exporters have reached out to Indian suppliers for help in fulfilling US orders, as they do not wish to lose their US clients. A deal that results in lower Chinese tariffs may potentially weaken the role of Indian suppliers.

The biggest shift so far has been in the electronics sector. Apple CEO Tim Cook said that the majority of iPhones sold in the US during the third quarter of 2025 will be exported from India. However, he added that he could not offer a longer-term outlook due to the evolving trade war between the US and China, where Apple currently manufactures most of its products.

Richard Baldwin, Professor of International Economics at IMD Business School, said that if high tariffs on China remain, it would be advantageous for large emerging markets.

“China was a big competitor before, and it has now been hobbled,” he said. However, he pointed out that the now-deferred reciprocal tariffs did not cover pharmaceuticals and electronics — two sectors where India could have benefited most.

“From a geo-economic perspective, anything that’s bad for China is good for India,” Baldwin added.