India navigating global uncertainties like a ‘Chakravyuh’: Shaktikanta Das

India’s recent growth trajectory shows its capacity to navigate uncertainties like a "Chakravyuh", where the key challenge lies not in entering a crisis but in exiting it in a calibrated manner without creating fresh imbalances, said Shaktikanta Das, principal secretary to Prime Minister Narendra Modi.

Chakravyuh comes from the Mahabharata and refers to a multi-layered military formation that is easy to enter but difficult to exit, and is used as a metaphor here to describe the challenges of managing an economy under stress.

“It is like entering a Chakravyuh. In a crisis, you enter a Chakravyuh. Now, if you do not know the exit route, then the economy gets stuck, and you end up creating bigger problems than the ones you initially set out to tackle,” Das said on Thursday at the AIMA National Leadership Conclave.

Das, who was earlier the Reserve Bank of India (RBI) governor, also noted that these vulnerabilities are further intensified by the prospect of tightening financial conditions, as elevated public debt and widening fiscal deficits constrain policy space in several major economies. In fact, they carry the potential for future financial shocks.

However, in the face of global volatility, India has displayed remarkable resilience with its real gross domestic product (GDP) growing at 7.6% in 2025-26. “I would like to stress that India’s resilience alone does not explain the full story. In the last five years since covid-19, India did not just endure the period of turbulence – it transformed through it. The country witnessed deep digitalization across sectors, efficiency gains in government systems, and unprecedented expansion in infrastructure,” he added.

On 6 April, finance minister Nirmala Sitharaman also said that trade fragmentation, along with the ongoing West Asia conflict, means that 2026 could prove more challenging, as the global economy moves from episodic “shocks” to a state of “permanent volatility".

“The escalation of the Middle East conflict has evolved from a regional security concern into a systemic tremor, threatening the vital arteries of global energy and hardening the lines of a new multipolar world order,” Sitharaman said at an event organized by the National Institute of Public Finance and Policy (NIPFP), New Delhi.

Das emphasized that India's resilience is underpinned by several key factors, including macroeconomic stability, consistent policymaking, infrastructure-led development and strong domestic demand.

According to the Das, “Inflation is often described as a tax on the poor. Keeping it low enhances consumers’ spending power,” he said while stressing the importance of maintaining low inflation, calling it essential for economic stability and inclusive growth.

Reflecting on India’s policy response during global crises, he said authorities adopted a calibrated approach—introducing fiscal and monetary expansion when needed, followed by timely withdrawal to prevent excess liquidity from destabilising the system.

He pointed to structural shifts in the economy, including rapid digitalization, expansion of infrastructure and growth in emerging sectors such as electronics and semiconductors.

In its latest South Asia Economic Update released on Wednesday, the World Bank projected India’s economy to grow at 6.6% in 2026-27, slower than the estimated 7.6% expansion in 2025-26. The moderation reflects the impact of global uncertainties, particularly the US-Israeli war with Iran.

The multilateral lender’s projection is slightly lower than the 6.9% growth forecast by the RBI in its latest monetary policy statement, and the government’s estimate of 6.8–7.2% made in January, before the escalation of tensions in West Asia.

Das expressed confidence in India’s economic trajectory, citing strong structural drivers such as a favourable demographic profile, rising consumption, infrastructure investment and digital public infrastructure.

“These are not temporary tailwinds—they are durable and compounding strengths,” he said.