Expert view: Shubham Jain, Group CEO of Infomerics Valuation and Ratings, underscores that India’s medium-term growth trajectory remains robust, in the 6.3-6.8 per cent range, with the potential to exceed 7 per cent if global headwinds ease and reform momentum continues. However, a volatile US trade policy represents a significant risk for India, particularly for its export-oriented sectors. In an interview with Mint, Jain shared his views on the Indian economy, the US-China trade tussle and its potential impact on India, among other things. Here are edited excerpts of the interview:
What is your medium-term outlook for India’s economic growth?
India’s medium-term economic outlook appears strong and resilient, supported by robust domestic fundamentals and continued policy momentum.
As per our expectation, the median projection for India’s real GDP growth for FY25-26 stands at 6.7 per cent, with estimates ranging between 6.3 per cent and 6.8 per cent.
The upward revisions in forecasts are largely attributed to the positive effects of GST rationalisation, monetary easing prospects, and stronger agricultural output aided by a favourable monsoon.
However, the outlook is not without challenges. The 50 per cent US tariffs on Indian exports could exert some drag on external demand and manufacturing growth in the coming quarters.
On the positive side, inflation has moderated sharply, and retail inflation fell to an eight-year low of 1.5 per cent in September 2025, creating room for potential monetary policy easing and supporting real incomes.
With comfortable forex reserves ($699.96 billion as of 3 Oct’25) and stable credit conditions, macroeconomic stability remains intact.
Overall, India’s growth trajectory in the medium term remains robust, with a projected range of 6.3-6.8 per cent, and the potential to exceed 7 per cent if global headwinds ease and reform momentum continues, positioning India firmly among the fastest-growing major economies globally.
Is a volatile US trade policy a major risk for India?
A volatile US trade policy represents a significant risk for India, particularly for its export-oriented sectors, although the country’s large domestic market provides some insulation.
Recent US tariff hikes in 2025 have sharply affected labour-intensive industries, including textiles, gems and jewellery, leather, and seafood, resulting in reduced export orders, lower competitiveness, and employment challenges for MSMEs.
Beyond the direct trade impacts, volatility in US policy will continue to affect the exchange rate, spur inflation through higher import costs, and increase stock market uncertainty, while also benefiting other exporting countries, such as Vietnam and Bangladesh.
However, India has mitigating factors: a strong domestic consumption base, diversification of trade partners, diplomatic engagement to resolve disputes, and resilience in sectors.
In general, while a volatile US trade stance poses a material risk, India’s domestic strength and strategic measures help moderate the impact.
How could a strained US-China trade relationship impact the global economy? Can China’s pain be India’s gain?
While a strained US-China trade relationship disrupts the global economy, India has a real but conditional opportunity to gain market share and attract investment.
A strained US-China trade relationship is likely to disrupt global supply chains, increase market volatility, and slow overall economic growth.
Escalating tariffs and export controls have accelerated the “China+1” strategy, prompting companies to engage with countries like Vietnam, Thailand, and India.
Economic uncertainty stemming from trade tensions can also fuel inflation, dampen investment, and exacerbate geopolitical fragmentation, thereby reducing the efficiency of global trade.
The tension has been escalated after China’s export control policies on rare earths and critical minerals. However, after the recent retaliation by China at the US, Trump has tried to ease the tension by posting on “Truth Social” – “Don’t worry about China, it will all be fine!
The USA wants to help China, not hurt it.” Before this, there was an immediate threat of a 100 per cent tariff and major export controls.
The possibility of negotiations was also flagged by Vice President JD Vance, who echoed those sentiments earlier in an interview with Fox News, highlighting that the US will negotiate if Beijing is “willing to be reasonable,” despite adding that the US has “far more cards” if not.
For India, this disruption presents opportunities to attract foreign investment and expand its export market share, particularly in sectors such as textiles, electronics, and toys.
Initiatives such as “Make in India” and production-linked incentive (PLI) schemes have positioned India as a viable alternative manufacturing hub.
However, these potential gains come with risks, including competition from other countries, infrastructure and regulatory challenges, the possibility of cheap Chinese imports flooding domestic markets, and exposure to broader trade volatility.
India needs to strategically connect with other countries to maximise its export potential and to mitigate such headwinds stemming from US-China tensions.
Furthermore, India can learn from Vietnam, Malaysia, Thailand, and other countries regarding how these countries have expanded their exports in both the US and China, taking advantage of the conflicts between the global giants.
In essence, India can benefit from China’s pain, but realising these gains requires strategic policy measures, investment in infrastructure, and careful management of competitive and market risks.
Why are we seeing an increased criticism of global agencies for biases in ratings?
The increased criticism of global credit rating agencies (CRAs) stems from concerns over methodological biases, conflicts of interest, and geopolitical influences.
Additionally, geopolitical considerations and home-country biases can influence ratings, raising concerns about the fairness and objectivity of the ratings.
These factors have prompted calls for reform, including the support of local credit rating agencies, methodological transparency, and potentially a separate rating framework for emerging economies, aiming to provide more accurate, context-sensitive, and unbiased assessments.
How do you see the demand for region-specific frameworks? Do you think it will assess a country’s creditworthiness more effectively?
Region-specific frameworks can improve the assessment of a country’s creditworthiness, provided they address credibility, consistency, and governance challenges.
The demand for region-specific creditworthiness frameworks is growing, driven by the need for more accurate, unbiased, and contextually relevant assessments, particularly for emerging and developing economies.
Region-specific frameworks can address local factors, such as economic size, per capita income, commodity dependence, and institutional structures.
This can result in fairer, more nuanced ratings that better reflect a country’s fundamentals, improve investor confidence, and reduce borrowing costs.
Moreover, regional frameworks encourage competition, enhance transparency through closer regulatory oversight, and provide deeper local insights.
However, their effectiveness depends on overcoming challenges such as establishing credibility, managing potential home bias, avoiding conflicts of interest, and ensuring methodological consistency.
Overall, if implemented well, region-specific frameworks can complement global ratings, offer a more comprehensive and accurate assessment of a country’s creditworthiness, while fostering a more inclusive and balanced global rating ecosystem.
How are elevated global interest rates and volatile capital flows affecting corporate refinancing?
Elevated global interest rates and volatile capital flows are affecting corporate refinancing in India, particularly for firms with substantial foreign currency debt.
Higher interest rates in developed economies such as the US increase the cost of borrowing globally, forcing Indian companies to refinance at higher rates.
This has led to increased corporate bond yields and strained the financial performance of highly leveraged firms, particularly those in the high-yield and speculative-grade categories.
Volatile capital flows further exacerbate the situation, creating exchange rate risks, domestic liquidity fluctuations, and potential financial instability, which can complicate refinancing efforts.
While the RBI has introduced reforms to the external commercial borrowing (ECB) framework, including higher borrowing limits, removal of cost ceilings, and monetary policy adjustments to ease access to capital, the benefits are uneven.
Highly rated companies are relatively insulated, whereas lower-rated firms remain most vulnerable.
As a result, Indian corporations are increasingly seeking alternative funding sources, although they continue to be influenced by global economic conditions.
Overall, corporate refinancing remains challenging but manageable, provided companies carefully manage debt maturity, interest costs, and currency exposure amid a complex global financial environment.
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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of the expert, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.