India must stay the course amid global volatility: Neelkanth Mishra at BT India @100 Summit

As geopolitical tensions and tariff uncertainties shake global markets, India must focus on its long-term fundamentals rather than short-term shocks, said Neelkanth Mishra, Chief Economist at Axis Bank and Member of the Prime Minister’s Economic Advisory Council, during a fireside chat at the BT India@100 Summit.

Responding to US President Donald Trump’s recent tariff salvos aimed at India and other economies, Mishra said the move should be viewed more as a negotiating gambit than a clear strategic shift. “The signs are ominous, yes, but this is not an attempt to take away from India,” he remarked. “Even close allies like Taiwan, Japan, and Korea are struggling to interpret the U.S. stance.”

He cautioned that the tariffs — averaging 18% — will ultimately impact U.S. consumers more than Indian exporters. “The US government might collect $500-600 billion through tariffs, but that money will mostly come out of American shoppers’ pockets,” Mishra noted. He also pointed to a surge in under-invoicing and trans-shipment, with trade data discrepancies — especially between China and the US — revealing how companies are dodging duties post-2017.

On the domestic front, Mishra acknowledged the absence of a much-anticipated private capex boom but emphasized that India's economic base has grown significantly stronger. “India’s cost of capital is now the lowest it has been since independence. A well-rated corporate can now borrow 10-year funds at just 7%,” he highlighted, crediting this to sustained fiscal consolidation and infrastructure improvements.

Rejecting comparisons with China’s rapid development trajectory, Mishra advocated for India’s slower but steadier approach. “We’re not trying to win a race. We’re trying to build something that’s shock-resilient and sustainable,” he said. “It’s like we’re driving at 20 kmph on a bumpy road — it’s slow, but safe.”

He cautioned that low-income consumption remains under pressure due to stagnant real wages and excess labour, but projected robust growth in India’s services sector. “From healthcare and education to global capability centres, our services can drive the next wave of growth. In a world that needs young, skilled talent, India is well-positioned to lead,” he concluded.