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According to the Reserve Bank of India (RBI), the Indian economy is not immune to global headwinds, but it still shows resilience, as pointed out in the October 2025 RBI Bulletin's latest State of the Economy article.

The bulletin noted that the main reasons for the aforementioned strength of the economy are the existence of strong and durable macroeconomic fundamentals such as low inflation, good bank and corporate balance sheets, enough foreign exchange reserves, and a trustworthy monetary and fiscal framework.

"While the Indian economy is not immune to global headwinds, it has so far exhibited resilience, driven by a focus on strong and durable macroeconomic fundamentals - including low inflation, robust balance sheets of banks and corporates, adequate foreign exchange reserves and a credible monetary and fiscal framework," the RBI Bulletin said.

Despite the difficult situation of trade wars and the rising trend of protectionism among developed countries, the RBI continued to indicate that the Indian economy is firmly on the right track, as it is backed by the structural reforms and domestic demand, which are both reliable and continuous, as reported by ANI.

The bulletin further added that "The state of flux of the global economy and policies present considerable uncertainties to the macroeconomic outlook. In this scenario, the need for economic resilience has become a key priority."

With trade tensions starting to 'simmer yet again', the report emphasised that "In the context of rising protectionism in the US, and rising fiscal risks in AEs, IMF’s October World Economic Outlook talks about a new global economic landscape slowly taking shape."

The document also mentioned that the domestic factors have been very effective at mitigating the impact of external demand, thus making the growth of the country's economy very strong and continuous.

As per the Monetary Policy Committee's October resolution, the growth of India's real GDP has been revised upwards to 6.8 per cent for FY2025-26, while CPI inflation has been projected lower to 2.6 per cent.

The Reserve Bank of India also noted that, "The depreciation in the real effective exchange rate was mainly driven by the depreciation in the nominal effective exchange rate."

Moreover, the Central Bank mentioned that the possession of sufficient foreign currency reserves and a strong financial system acts as a cushion for India to handle external shocks and hence its growth rate remains among the highest for major economies, notwithstanding the global recession, as reported by ANI.

The RBI Bulletin also stated, "India's foreign exchange reserves remained adequate, providing a cover for more than 11 months of goods imports and for about 93 per cent of the external debt outstanding at end-June 2025."