{
  "id": 11979598,
  "title": "India growth fundamentals face external shock risk",
  "url": "https://urgent.news/2026/10/04/india-growth-fundamentals-face-external-shock-risk",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-04T17:27:12.000Z",
  "source": {
    "name": "The Economic Times",
    "slug": "the-economic-times",
    "url": "https://economictimes.indiatimes.com/news/economy/indicators/indias-strong-growth-fundamentals-face-risks-from-prolonged-external-shocks-erik-berglof/articleshow/134678616.cms"
  },
  "original_language": "en",
  "account": "New Delhi - India's robust growth fundamentals remain stable, but prolonged external shocks and global uncertainty pose significant risks to the economy, Erik Berglof, Center Director at Stockholm School of Economics, warned. Speaking at the Kautilya Economic Conclave, Berglof highlighted that while India boasts strong growth prospects, global instability, particularly in the Gulf region, has put stresses on the economy. He emphasized that the economy's fundamentals support high growth, but the challenge lies in external disruptions.\n\nBerglof noted that the extended geopolitical shock could impact India, despite government measures designed to shield households from its effects, potentially weakening incentives to reduce fossil fuel dependence and hasten the transition to cleaner energy. He stressed the need to build resilience by investing in a more decentralized and renewable-based energy system.\n\nRegarding US tariffs, Berglof pointed out that India has been disproportionately affected. He stressed that the uncertainty and arbitrary nature of tariff measures are as concerning as the tariffs themselves. Berglof urged India to strengthen resilience against climate shocks, geopolitical risks, and other external disruptions.\n\nBerglof also cautioned about rising US bond yields and their potential impact on emerging and developing economies. He noted that heightened interest costs could be particularly damaging amid elevated debt levels and substantial repayments expected over the next five years. However, he pointed out that India is in a better position than many other emerging economies due to its significant buffers and lower debt levels compared to some vulnerable countries, largely attributed to sound fiscal policies.\n\nOn India's fiscal position, Berglof suggested that a deficit would not be a major concern if the Middle East conflict was resolved. Nonetheless, prolonged uncertainty requiring higher deficits over several years could prove damaging. He also highlighted energy and water security as areas needing greater resilience. India faces significant challenges in these areas, Berglof emphasized, requiring domestic reforms, including the pricing and management of water. Despite the strong growth fundamentals in India, he stressed that addressing external and domestic vulnerabilities is crucial for sustaining growth.",
  "summary": null,
  "key_points": [
    "India's growth fundamentals remain stable despite external shocks risk",
    "Prolonged global uncertainty, especially in the Gulf region, poses significant risks",
    "US tariffs disproportionately affect India, emphasizing need for resilience"
  ],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}