Reserve Bank of India’s (RBI) Governor Shaktikanta Das has said that there has been no recession in the global economy. However, there exists a hostile environment that is a ground for India’s external sector to show great resilience and viability.  

RBI Governor’s take on India’s external sector 

Talking at the Bloomberg India Economic Forum 2019, Governor Shaktikanta Das said, “India's external sector has exhibited resilience and viability. The current account deficit has averaged 1.4% of GDP over the last 5 years and remains comfortably financed in spite of global spillovers imparting risk-on-risk-off volatility to portfolio flows. The level of foreign exchange reserves was at USD 429 billion on September 13, sufficient to cover close to 10 months of imports or 21 months of debt of residual maturity up to 1 year. The Indian economy remains a preferred habitat for foreign direct investment (FDI) and is among the top 10 destinations for greenfield projects.  Net foreign direct investment at US$ 18.3 billion in April-July 2019 was higher than US$ 11.4 billion in the corresponding period of 2018-19” .

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India's service exports 

While praising India’s service exports, Das added, “In line with the expanding share of services in domestic output, India's services exports have grown rapidly over the past two decades. At USD 81.9 billion, net services exports financed 45% of India's trade deficit in 2018-19.” He also said that there has been a display of a higher degree of resilience to global shocks by India’s service exports compared to that of merchandise exports. Additionally, he pointed out that India continues to be a world leader in Information Technology (IT) enabled and software exports. He stated that India accounts for 12% of the world’s software exports. 

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"The global environment is challenging, but it offers opportunities as well. By the IMF's (Indian Monetary Fund) assessment, India will account for a sixth of global growth in 2020. Trade wars are presenting new business relocation avenues that seem to be favorable to India from the point of view of the economies of scale and scope. Indian entrepreneurship, the rupee, and our people are progressively but inexorably internationalising," said the RBI Chief.

(With Agency Inputs)

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