Domestic capacity, reforms key amid global uncertainty: Shaktikanta Das

During a discussion at the Kautilya Economic Conclave, Shaktikanta Das, a Principal Secretary-2 to the Prime Minister, emphasized the importance of structural reforms, domestic capacity building, and fiscal, monetary, macroeconomic, and macrofinancial stability amid global uncertainties. Das stated that India is on the cusp of achieving an 8% growth rate and highlighted the government's focus on areas where the country is heavily reliant on imports, such as energy and fertilizers, to enhance self-reliance.

The former RBI governor stressed that self-reliance should not equate to isolation but rather involve building stronger domestic capabilities while remaining integrated with global markets. India's real GDP growth exceeded 8% in the first quarter of 2026-27, according to Das, and he attributed the country's resilience to broad and mutually reinforcing reforms, including flexible inflation targeting, the Goods and Services Tax, fiscal prudence, digital payments, and banking sector reforms.

On the external front, Das noted that India's financial sector and prudent management have been crucial in maintaining economic stability, with resilient external sector indicators driven by export diversification, free trade agreements, a surplus in services trade, and steady inward remittances. Looking ahead, Das called for harnessing the AI revolution to sustain high growth, emphasizing India's strategy to develop sovereign AI capability through investments in indigenous foundation models, high-performance computing, semiconductors, and innovation ecosystems.

Additionally, Das stressed the need to strengthen the financial sector to support India's expanding economic weight, particularly by deepening the corporate bond market, pension and insurance funds, municipal finance, and innovative infrastructure financing.