RBI Governor Malhotra asks US industry to invest in India

Washington: Reserve Bank Governor Sanjay Malhotra has exhorted the US industry to invest in India, stressing that the country continues to be the fastest growing major economy supported by policy consistency and certainty.

Addressing the US-India Economic Forum organised by the Confederation of Indian Industry (CII) and US India Strategic Partnership Forum (USISPF) here on Friday, Malhotra said that India is expected to record a growth rate of 6.5 per cent in the current financial year despite tremendous increase in uncertainty and volatility in global financial markets.

"At a time when many advanced economies are facing economic headwinds and a deteriorating economic outlook, India continues to offer strong growth and stability making it a natural choice for investors seeking long term value and opportunity," the governor said.

India, he added, "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 that India offers a policy ecosystem that is transparent, rule-based, and forward-looking -- an ideal setting for long-term and productive investments.

As the world's fastest-growing major economy, India is not just a destination for investment, it is a partner in prosperity, he said, adding, "together, we have the chance to shape the future -- not only for India but for a better world. I invite you to be a part of this journey, to collaborate, innovate, and invest in India."

Observing that the Indian economy has demonstrated remarkable resilience and dynamism, Malhotra said that over the past four years (2021-22 to 2024-25), the country recorded an average annual growth rate of 8.2 per cent.

"It was and continues to be the fastest-growing major economy in the world. This is a significant step up from the average growth rate of 6.6 per cent in the preceding decade (2010 to 2019)," he added.

Even in the current financial year, he said that growth was expected to remain robust at 6.5 per cent. This, he added, "is despite the tremendous increase in uncertainty and volatility in global financial markets." Although 6.5 per cent growth rate falls short of India's aspirations, it remains broadly in line with past trends and the highest among major economies, he said.

Malhotra told the gathering over the last ten years, India has leapfrogged from the tenth largest economy to the fifth. In terms of purchasing power parity, India is already third.

"Even nominally, we are poised to become the third largest economy shortly. We aspire to become Viksit Bharat, i.e., a developed economy by 2047, when we complete 100 years of our independence. While there is indeed a scope for India's growth trajectory to rise over the medium to long-term, I am sanguine of our continued success," the governor said.

He further said India's financial sector is strong and vibrant, efficiently catering to funding requirements of various economic agents.

The banking sector, which continues to meet the large funding requirements of the economy, has demonstrated resilience with healthy balance sheet.

He said the soundness of scheduled commercial banks (SCBs) has been bolstered by strong profitability, lower non-performing assets and adequate capital and liquidity buffers. The health of the non-banking financial companies (NBFCs) sector is also robust.

Bank credit growth, although moderating in recent months, continues to be in double digits (about 12 per cent) compared to an average of about 10.5 per cent in the last 10 years, he said.

"We are committed to further enhancing the capacity, responsiveness, and resilience of the banking and non-banking financial sectors with emphasis on balancing regulation with efficiency and stability. While offering excellent opportunities for investment, as private debt to GDP is still on the lower side, the banking sector is poised to meet the investment needs of the society and industry," Malhotra said.

The governor also said proactive government policies also present unparalleled opportunities for investment in sunrise sectors such as space, semiconductors, renewable energy, electric vehicles (EVs).

India is positioning itself as a critical link in global supply chains, encouraging local sourcing and manufacturing. It is also becoming a global SaaS innovation hub, especially in generative AI, he added.