India's calm amid South Asia's storm

New Delhi, Nov 9 (IANS) From Kathmandu to Karachi, South Asia is in turmoil. Nepal has seen "Gen Z" protests erupt over inequality and political elitism, while in Bangladesh, students led a revolution last year that ended former Prime Minister Sheikh Hasina's 15-year rule.

Sri Lanka's 2022 economic collapse forced its President Mahinda Rajapaksa to flee, and Pakistan remains mired in political chaos and another IMF bailout. Yet, in the midst of all this, India stands out for its stability, said a report by The Economist.

The report highlights that despite being hit by US President Donald Trump's punitive trade tariffs over Russian oil purchases and engaging in a brief military exchange with Pakistan, India’s economy has shown remarkable resilience.

With foreign-exchange reserves of nearly $700 billion -- enough to cover 11 months of imports -- and steady growth of 6-8 per cent, India looks like a calm island in a turbulent neighbourhood.

This wasn't always the case.

Since Independence, India has faced repeated balance-of-payments crises -- from the 1965 war and drought to the 1991 Gulf War, when the country had to airlift gold to secure loans.

Reforms under then-Finance Minister Manmohan Singh opened India's economy and ended the "licence raj", laying the groundwork for today's stability.

Even as recently as 2013, India was counted among the "fragile five" economies vulnerable to global shocks.

Since then, it has cleaned up its banking system, reined in bad loans, and exercised fiscal restraint, The Economist highlights.

The budget deficit has fallen from nine per cent during the pandemic to below five per cent, with plans to reduce debt-to-GDP from 57 to 50 per cent by 2031.

Oil dependency, once India's Achilles heel, has eased through cheap Russian imports, expanded refinery capacity, and ethanol blending policies.

Service exports -- mainly IT and outsourcing -- now contribute 15 per cent of GDP, cushioning external shocks. Still, challenges remain.

Graduate unemployment hovers near 30 per cent, and caste-based job reservations fuel resentment.

Yet, unlike neighbours gripped by street protests, India's young appear patient, the report said.

Surveys show they are moderately dissatisfied today but hopeful for tomorrow.

In a volatile region, that optimism -- rooted in visible growth and economic progress -- may be India's strongest stabiliser.

--IANS

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