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‘Very big on India’: IMF chief heaps praise on India’s ‘bold’ reforms; says it proved doubters wrong

Georgieva commended India’s significant economic and structural reforms. (AI image)

At a time when the global economy is looking at uncertainty due to Donald Trump’s tariffs,IMFManaging Director Kristalina Georgieva has said she is ‘very big’ on India. Praising India for its reforms, Georgieva said that the country has proved people wrong with its digital approach.”I’m very big on India because of the boldness of their reforms. For example, everyone told India that digital identity on a mass scale could not be done… but India proved them wrong,” she said on Monday.Georgieva commended India’s significant economic and structural reforms during the first day of the organisation’s bi-annual meeting of finance ministers and central bank heads. She specifically highlighted changes in tax legislation, digital payment systems and the implementation of Aadhaar.The substantial reforms she referenced included the significant GST restructuring in September.This recognition follows her earlier positive assessment from the previous week, where she identified the economy as a ‘key growth engine’ in the context of global post-pandemic recovery.India has emerged as a crucial driver of global economic growth, she said. “Global growth is forecast at roughly 3 per cent over the medium term – down from 3.7 percent pre-pandemic.Global growth patterns have been changing over the years, notably with China decelerating steadily while India develops into a key growth engine,” the IMF Chief observed.She identified four key elements contributing to economic stability: enhanced policy foundations, business sector flexibility, less intense tariff implications than anticipated, and favourable financial environment.Regarding trade, Georgieva remarked: “the full effect is still to unfold.In the US, margin compression could give way to more price passthrough, raising inflation with implications for monetary policy and growth. Elsewhere, a flood of goods previously destined for the US market could trigger a second round of tariff hikes.India is the world’s fastest growing major economy and as per IMF estimates will overtake Japan to become the fourth largest economy in nominal GDP terms by the end of this fiscal year.In the coming years, it is also projected to become the third largest after the US and China, surpassing Germany.India’s economy faces headwinds with the Donald Trump administration levying 50% tariffs on its exports to the US. However, most economists are of the view that since India’s growth story is largely driven by domestic fundamentals, the impact on GDP growth would be nominal.In its latest monetary policy, theRBIsaid, “The implementation of several growth-inducing structural reforms, including streamlining of GST are expected to offset some of the adverse effects of the external headwinds. Taking all these factors into account, real GDP growth for 2025-26 is now projected at 6.8 per cent, with Q2 at 7.0 per cent, Q3 at 6.4 per cent, and Q4 at 6.2 per cent. Real GDP growth for Q1:2026-27 is projected at 6.4 per cent. The risks are evenly balanced.”