Chief economists worldwide have begun warning the public that a global recession/ market meltdown is inevitable in the wake of the global pandemic. The early signs are already being felt in all economies with the complaints of the financial crisis in the name of increasing prices, high unemployment, layoffs and general economic contraction globally.
However, amidst all this chaos, India seems to be thriving and continuing with the growth momentum it has shown over the past couple of years.
Interestingly, a recent Bloomberg estimate about the probabilities of nations going into recession estimated the United States at around 40 per cent, Europe at around 50-55 per cent, and India at 0 per cent. This was backed up by the Reserve Bank of India’s economic assessment in July 2022.
So how is India making it possible? Now that’s a million-dollar question for many around the world. To keep it simple, two main factors differentiate India from the rest of the countries facing massive economic downturns.
The first is the excellent performance of the agricultural and manufacturing sector, which has risen to become a beacon of hope despite the supply chain difficulties during multiple lockdowns. India’s agricultural and manufacturing industries have continued to thrive during this period and promise to lead the country’s economic recovery. This also complements India’s growing population that has become increasingly consumerist, giving way for these industries to thrive.
The second factor that creates a significant divide between the western countries facing the recession and the Indian economy is India’s foreign policy, especially concerning Russia. The bilateral & special relationship between the two countries has been pointed out as controversial by many other international partners. However, despite the backlash the government received for its continuance of diplomatic and economic relations with Russia both on domestic and international fronts regarding the ongoing Ukraine War, India managed to stand firmly on its decision which it views as its interests. As one of the few large countries that continues its ties with Russia, India received around 2.3 billion dollars in April 2022, a 200% increase from the previous years. This number proves how successful India’s continued relationship with Russia has been during these times.
After recovering from the pandemic-infested economy, India could not afford to further fall into recession and suffer losses. Moreover, being a country that houses 1.4 billion citizens, India has a specific responsibility and promise to its citizens, and making tough decisions, such as keeping its ties with Russia, is something India needs to do, despite the pressure, in order to ensure sustainable success for itself. Tough decisions and determination like the above and many saved the nation from the massive economic downturn. Not only did India swung into action quickly and protected its population, but it successfully met all its global commitments- Be it leading by example through medical advancement, climate protection, digital empowerment and last-mile financial inclusion; its agile response has been commendable.
The author is a Mumbai – based student writer: Sia Kusumgar