New Delhi, May 21 || India is in a stronger position than other countries to withstand global trade disruptions, in the wake of the US tariff turmoil, due to the large size of its domestic market and the country’s low dependence on goods exports, according to a Moody’s report released on Wednesday.
The report points out that the government initiatives, such as increasing infrastructure investment, steps taken to boost private consumption, will help shield India’s economy from weakening global demand.
“India’s large domestic economy and limited exposure to global goods trade puts it in a stronger position to absorb external shocks,” the report said.
Some sectors -- like automobiles, which export to the US -- may encounter global headwinds, despite their diversified operations. But India’s robust services sector and large domestic economy provide strong buffers, according to the report.
The report also states that declining inflation is expected to pave the way for a soft monetary policy with interest rate cuts to spur growth. The banking sector also has sufficient liquidity to support credit growth, according to the report.