RBI governor pitches India as haven for growth and stability

Reserve Bank of India (RBI) governor Sanjay Malhotra pitched India as a haven for strong growth and stability, while inviting investors seeking long-term value and opportunity to invest in India at a time when many advanced countries are facing economic headwinds and a deteriorating outlook.

India continues to be an economy supported by stability–monetary, financial and political; policy consistency and certainty; congenial business environment; and strong macroeconomic fundamentals, Malhotra said at the US India Economic Forum, organized by the Confederation of Indian Industry (CII) and the US India Strategic Partnership Forum (USISPF) in Washington, D.C.

“Our strong domestic demand and relatively lower dependence on exports cushions the Indian economy from external spillovers,” he said, adding, “India offers a policy ecosystem that is transparent, rule-based, and forward-looking–an ideal setting for long-term and productive investments.”

Malhotra noted India and the US can ” shape the future—not only for India but for a better world,” and urged US investors to “join this journey, collaborate, innovate, and invest in India.”

Stressing fiscal prudence and efficiency, Malhotra said the government’s fiscal policies have played a critical role in catalyzing and sustaining economic development by ensuring that savings and public funds are used efficiently in productive sectors.

He said that the central government’s fiscal deficit to GDP ratio has declined from 9.2% in 2020-21 to 4.8% in 2024-25, and it is budgeted to moderate further to 4.4% in 2025-26.

India’s public debt to GDP ratio, at 81.3 % (in 2024), is reasonable, with the world’s top 10 economies other than Germany having higher public debt than India.

He added that the progressive fiscal consolidation in India has enhanced the private sector’s ability to raise investment resources.

Malhotra added that India has opened almost all sectors to up to 100% foreign direct investment (FDI) and that almost 90% of FDI is now through the automatic route.

He added that in recent years, India introduced a series of liberalization measures to further open up the economy, particularly in key sectors such as defence, insurance, petroleum and natural gas, telecom, and space.

Malhotra said that gross foreign direct investment (FDI) inflows to India increased to $75.1 billion in April-February 2024-25 from $65.2 billion during the same period a year ago, reflecting foreign investors continued confidence in the Indian economy.

Net FDI inflows, however, moderated during this period due to higher repatriations and outward investment, which, he added, is a sign of a mature market where foreign investors can enter and exit smoothly. He said this “reflects positively” on the Indian economy.

Malhotra added that India’s foreign exchange buffer continues to be strong. As of 18 April 2025, India’s foreign exchange reserves, at $686.1 billion, cover over 11 months of imports and 96%  of external debt outstanding at the end of December 2024.