The Indian economy has withstood all geopolitical shocks in recent years, and it will be able to navigate the uncertainties ahead. The ongoing downturn in China has resulted in significantly lower demand for energy and other commodities, mitigating the negative consequences of supply shock.
India’s economy is expected to increase by 7.3 percent in the current fiscal year, up from 7.2 percent in 2022-23. According to the International Monetary Fund’s (IMF) World Economic Outlook, global growth is expected to slow from 3.5% in 2022 to 3% in 2023, and then to 2.9% in 2024.
The situation near the Bab-el-Mandeb Strait, a critical shipping route connecting the Red Sea and the Mediterranean Sea to the Indian Ocean, has deteriorated as a result of recent strikes by Yemen-based Houthi terrorists.
Because of these attacks, shippers are routing consignments through the Cape of Good Hope, resulting in nearly 14-day delays and increased freight and insurance expenses.The Red Sea route is also important for energy transportation.
According to the most recent government data, retail inflation surged at the quickest rate in four months in December 2023, reaching 5.69 percent, due to increases in the prices of vegetables, legumes and spices.