India faces external headwinds despite resilient growth, finance ministry warns

India's finance ministry has flagged mounting external pressures in its September economic review, even as the country maintains strong domestic growth and external buffers.

The review cited US trade tensions, the global AI investment surge, and developed economies' push into manufacturing as key challenges facing the Indian economy. Despite these headwinds, the ministry underscored that India cannot rely solely on its current growth momentum.

The assessment signals the government's caution about external vulnerabilities while acknowledging the resilience of India's domestic economy and foreign exchange reserves.