Robust fundamentals shield nation from mounting overseas pressures

STORMS WEATHERED WELL | Healthy balance sheets fuel confidence

PTI New Delhi

Macroeconomic fundamentals of the Indian economy remain strong, supported by robust domestic demand, healthy corporate balance sheets, and sustained fiscal discipline amid global challenges, Union Minister of State for Finance Pankaj Chaudhary told Parliament on Tuesday.

Further, according to the Reserve Bank of India’s Financial Stability Report (June 2026), the domestic financial system remains resilient, underpinned by strong bank and non-bank balance sheets, Chaudhary said in a written reply in the Rajya Sabha. 

"As a major player in global markets, India's economy is also linked with international trends, which impact its exchange rate movements. Since the start of the West Asia conflict, the Indian Rupee has depreciated against the US Dollar by 5.8% in FY27 (from February 27 up to July 22, 2026)," he said. At present, the macroeconomic fundamentals of the Indian economy remain strong, he said, adding that real GDP has consistently grown at over 7% during the last three years. Economic growth continues to be supported by robust domestic demand, healthy corporate balance sheets, and prudent fiscal management.  

High-frequency indicators for the first quarter of 2026–27 point to sustained momentum in economic activity and domestic demand, indicating the continued resilience of the Indian economy. The Index of Industrial Production recorded a growth rate of 4.9% year-on-year in April 2026 and 5.1% year-on-year in May 2026, indicating continued investment-led industrial growth despite heightened global uncertainty. 

"Industries reliant on imported inputs may face cost pressures. Thus, to support stability, the Government is easing import-led inflation through duty adjustments, expanding micro, small and medium enterprise credit, ensuring affordable financing, attracting long-term foreign direct investment, promoting trade facilitation and digital platforms, and advancing free trade agreements," he said. 

The value of the Indian Rupee is market-determined, with no target or specific level or band. The Reserve Bank of India regularly monitors the foreign exchange market and intervenes in situations of excess volatility, and monitors key developments across the globe which may have an impact on the USD-INR exchange rate. 

In reply to another question, Chaudhary said Regional Rural Banks posted the highest-ever net profit of ₹10,177 crore in 2025–26. The financial health of regional rural banks has improved in recent years, showing consistent improvement in key financial parameters like Capital to Risk Weighted Asset Ratio, deposits, advances, non-performing assets, and credit-deposit ratio.