Domestic infrastructure, both physical and electronic, has improved considerably, social welfare has expanded, consumer confidence has risen, and asset markets are buoyant.

External balances, long susceptible to volatile investment flows and global energy shocks, are beginning to turn for the better as services surplus offsets most of the trade deficit, it said.

“All of this is remarkable given that India has faced two major shocks since 2020. First was the economic contraction during the Covid pandemic, while the second was the food/energy terms of trade shocks after Russia’s invasion of Ukraine. At currently projected growth rates, it will only be in 2026 that India will make up the ground lost during the pandemic, illustrating the magnitude of the shock,” the research said.

Meanwhile, buying crude oil from Russia and exporting some of it in refined form was a shock absorber in 2022-23. Looking at the 2024 outlook, although inflation remains under RBI’s scrutiny, the economy seems to be doing just fine without additional monetary or fiscal easing. Looking at demand markers both at urban and rural areas, real GDP growth of 5.5-6.5% is par for the course now, it said.

The report said India needs to reduce tariff and nontariff barriers to trade and make progress towards becoming embedded in the regional supply and value chains. No economy is large enough to do it alone in this world of complex production processes. Regional cooperation and openness to trade will provide India with the kind of high return endeavours critically needed for the prosperity the nation aspires.