‘India Is A Key Growth Engine Powering The World’: Why IMF Praise Stuns Global Economists | World News

Washington: The International Monetary Fund (IMF) has placed India at the center of the global growth story. IMF Managing Director Kristalina Georgieva called the country a “key growth engine” in a world still reeling from Trump-era tariffs and economic downturns.

“Global growth patterns have been changing over the years, particularly with China slowing steadily and India emerging as a major growth engine,” he said ahead of the IMF and World Bank’s annual meetings in Washington next week.

His remarks came as world markets reacted to sweeping tariffs imposed by US President Donald Trump on April 2. The IMF chief said the global economy remains solid despite the policy shock. “The global economy is doing better than feared, but worse than we need it to,” he said during an opening session at the Milken Institute.

Georgieva noted the unexpected strength of major economies, including the United States and India. “Growth is expected to slow only slightly this year and next,” he said, adding that “all signs point to a world economy that is generally resilient to acute stresses from multiple shocks.”

He attributed the relative stability to “improved policy fundamentals”, private sector adaptability and “lower-than-expected tariffs”.

He gave a cautious reassurance, emphasizing: “The world has so far avoided being dragged into a tit-for-tat trade war.”

Tariffs and Tensions

The IMF’s assessment comes as friction escalates over Trump’s tariff regime. On April 2, the United States imposed new trade barriers, including a 50 percent tariff on Indian imports, half of which targeted India’s discounted oil purchases from Russia.

Washington accused India and China of “financing” Moscow’s war against Ukraine. New Delhi argued that its decisions were based on national interests and market prices.

Georgieva appeared to downplay fears of a global economic spiral. “The full impact of these tariffs is still to be revealed. Global resilience has not been fully tested so far,” he said.

He added that although the U.S. tariff rate has fallen from 23 percent in April to 17.5 percent today, it remains “well above the rest of the world.”

India’s Growth Momentum

Meanwhile, India has ignored concerns about Washington’s tariff crackdown. Finance Minister Nirmala Sitharaman said the country’s fundamentals remain strong and growth is continuing at a sustainable pace.

“India’s economy continues to grow resiliently and sustainably,” he said last week, stressing that external shocks will have only a limited impact on India’s economic momentum.

The numbers support this claim. India recorded real GDP growth of 7.8 per cent in the first quarter of FY 2025-26, surpassing the Reserve Bank of India’s forecast of 6.5 per cent. Economists attribute this increase to strong consumer spending, higher investment flows and the recent cut in GST rates, which has boosted demand.

Georgieva’s recognition of India’s economic strength adds weight to the country’s growing influence in global economic policy debates. As IMF meetings begin in Washington, all eyes are on whether India can keep up the pace and help stabilize a fragile global recovery amid Trump’s trade turbulence.