Speaking to ET Now at the sidelines of the Mumbai Climate Week, Mishra said the world is undergoing “seismic shifts” without a coordinated grand strategy, leading to what he described as a potentially chaotic decade ahead. But amid this uncertainty, India stands out as a trusted, stable and open economy.
Global instability opens doors for India
“The world is looking for trusted partners and large pools of stable demand,” Mishra said, adding that India’s macroeconomic stability makes it well positioned to capitalise on global churn.
He highlighted the government’s emphasis on:
- Fiscal discipline
- Stable balance of payments
- Well-capitalised financial markets
- Openness through free trade agreements (FTAs)
According to him, nearly 70% of India’s exports are now covered under FTAs. The country is also relaxing Quality Control Orders (QCOs) and opening up markets—steps that reinforce its image as an open, rules-based economy at a time when mercantilist tendencies are rising globally.
With a large and growing domestic demand base, India could benefit as companies diversify supply chains and look for dependable growth markets.
Growth outlook: Why Mishra is confident
On whether India’s growth outperformance versus other emerging markets is sustainable over the next three to five years, Mishra expressed strong confidence.
He noted that in the past few years, fiscal consolidation was necessary to reduce debt-to-GDP ratios and bring down the cost of capital. However, this consolidation also acted as a drag on aggregate demand.
“Now that the fiscal deficit does not need to fall materially from here, the economy can return to its natural trend growth,” he said, suggesting that growth could accelerate from the subdued levels seen last year.
Investment cycle turning: Real estate and power in focus
Mishra pointed to early signs of a revival in key sectors:
- A turning real estate cycle
- A pickup in power generation
- Strong revival in corporate capex
While government capital expenditure has been a key driver in recent years, he clarified that public capex is only about 3.1–3.2% of GDP. India’s overall investment-to-GDP ratio stands at around 33%.
Significantly, this marks a sharp improvement from 2021, when the ratio was just 27%. That 6 percentage point rise in investment intensity, he noted, was largely driven by private sector participation.
“About 1.5% of GDP came from the central government, but the rest was private,” Mishra said.
Housing—both residential and commercial—forms a large share of this investment revival, underlining the broad-based nature of the recovery.
The big picture
In a decade that could be defined by global volatility and fragmented trade blocs, India’s combination of fiscal prudence, macro stability, domestic demand strength and rising private investment could provide a durable growth runway.
If these trends sustain, India may not just remain one of the fastest-growing major economies—it could also become a preferred economic partner in an increasingly uncertain world.