India remains Asia’s bright spot, but must ‘fire all cylinders’ to hit 8% growth: IMF’s Krishna Srinivasan

India continues to stand out as the fastest-growing major economy in the Asia-Pacific region, with its strong fundamentals, a well-managed fiscal deficit, and ongoing reforms working in its favour, said Krishna Srinivasan, Director of the IMF’s Asia and Pacific Department, during the Regional Economic Outlook press briefing on Thursday.

The IMF projects India’s economy to grow 6.6% in 2025 and 6.2% in 2026, maintaining its lead among major emerging markets despite global trade frictions. Srinivasan said, “Many things are working in India’s favour,” but added that to achieve the government’s ‘Viksit Bharat’ goal of becoming a developed economy, India “has to fire all cylinders to reach 8% or more growth.”

He noted that deeper structural reforms would be crucial to help India integrate more effectively into global supply chains and compete with China. “India needs to focus on pre-liberalisation reforms if it wants to position itself more competitively with China,” he said. Srinivasan also underlined the importance of diversifying export markets to reduce external vulnerabilities, adding that such diversification “helps insulate the economy from shocks.”

On trade, Srinivasan said a potential India–U.S. trade agreement could create significant upside for growth, especially if tariffs are lowered. “When tariffs are lower, there is an upside potential to growth next year,” he remarked.

Commenting on the broader regional context, the IMF expects the Asia-Pacific to grow 4.5% in 2025, moderating to 4.1% in 2026, and to contribute nearly 60% of global growth during this period. However, Srinivasan cautioned that intensifying trade tensions could dampen the global outlook, with Asia being more exposed. “If trade tensions intensify, it will affect the global economy, Asia more so,” he warned.

Despite global headwinds, Srinivasan described Asia’s 2025 story as one of resilience, underpinned by strong exports, a technology-driven boom, and accommodative macroeconomic policies. “Asia’s story for 2025 is one of resilience,” he said. “The task ahead is renewal, policies that anchor stability today while unlocking stronger, more durable growth tomorrow.”