Despite the headwinds of the war in Ukraine, India has many bright spots: Birla

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Despite global headwinds from the ongoing Russian-Ukrainian war and lingering post-pandemic challenges, India’s economy has some “bright spots” to help navigate the choppy waters, industrialist Kumar Mangalam Birla said on Friday. .

Addressing shareholders of Aditya Birla Capital Ltd (ABCL) at the company’s annual general meeting (AGM), Birla said the turn of the decade felt like a “starting moment”, making 2020 a unprecedented year marked by the pandemic, followed by the supply side woes of 2021 and then the Russian-Ukrainian war in 2022.

Global stagflation is giving 2022 an unprecedented feel and the disruptions now look like “business as usual”, Birla noted.

“The Indian economy has not remained unscathed from these global developments. India has also seen upward pressures on inflation, rate hikes by the RBI and a growing trade deficit. We are also witnessing a greater turbulence in the foreign exchange markets,” said Birla, chairman of Aditya. ABCL, the financial services arm of Birla Group.

Nonetheless, the Indian economy has several bright spots in its overall economic narrative with a strong recovery cycle and a projected growth rate of over 7% in the current fiscal year, he said.

Talking about the high inflation rate, which has remained well above RBI’s upper tolerance level for a few months, Birla said the overshoot has not been as severe as in many other countries.

Combative efforts by the RBI and the government to help ease inflationary pressures and the prospects of a good monsoon this year will further ease these pressures.

High foreign exchange reserves, which can cover more than 9 months of imports, are favorable data points, despite the increase in the trade deficit. These factors are helping India to remain stable despite the broader global economic turmoil, the ABCL chairman said.

“With these silver linings, India appears to be well placed to navigate through an uncertain global economic environment. India has a strong portfolio of infrastructure projects. production-related incentives are helpful.”

Among others, many new investment proposals by industries, strong foreign direct investment as well as declining non-performing assets in the banking sector are also helping to support growth, he noted.

Tech-based startups and new age companies have gained critical mass in India. These sectors are showing strong momentum, creating new jobs and improving the customer experience, Birla added.

“The dynamism of India’s digital ecosystem, the diversification of global supply chains outside of China and the increased focus of investors on sustainable finance also offer new opportunities for India,” he said. declared to the shareholders.

(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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