India not pushing for an alternative to US dollar, says CEA Nageswaran

India’s Chief Economic Adviser (CEA) V Anantha Nageswaran dismissed speculations that India was joining efforts to build an alternative currency to the US dollar, saying that no such move was under consideration.Besides, even as tariff disputes and geopolitical uncertainty weigh on global trade, Indian economy is better placed for good news rather than shocks, the CEA said an AIMA event on September 10. India’s economy remains on a firm footing, he affirmed.It may be noted here that India's real GDP expanded 7.8% in the first quarter of FY26, powered by rising economic activity rather than subdued inflation. Early data from July and August points to a continuation of that momentum into the second quarter.Among G20 peers, India stands out as the only economy to maintain strong growth consistently over the four years since the COVID-19 shock.Tariff hit on GDP, GST cut impact & moreThe net impact on Indian economy of Trump's tariffs and the recent GST reforms will be a reduction of 0.2%-0.3% on fiscal year 2026 GDP growth estimates, the CEA said.The growth is currently anticipated to be between 6.3% and 6.8%.Nageswaran attributed this resilience to a decade of reforms that have combined digital and physical infrastructure upgrades with the gradual formalisation of small and medium enterprises.The CEA argued that reforms such as the Insolvency and Bankruptcy Code, the Goods and Services Tax, the Real Estate Regulation Act, and public sector bank consolidation have collectively improved the business environment. Recent changes in tax administration and adjustments to GST rates have further smoothed compliance for companies.These measures, he said, are not just incremental changes but building blocks for sustained growth. Their effects are now visible in both output and employment trends.Nageswaran also pointed to India’s recent sovereign credit rating upgrade -- the first in almost 20 years -- from BBB- to BBB. The move, he said, reflects greater international confidence in the country’s economic management.Falling borrowing costs illustrate this shift. The 10-year government bond yield has dropped from 9% to 6.4%, easing financing conditions for both the state and private enterprises. At the same time, relatively stable energy prices over the past four years have kept inflation pressures in check.Fiscal prudence remains central to policy, and the government is on course to meet its 4.4% fiscal deficit target for the year, Nageswaran confirmed.Next phase of reformLooking ahead, he said, competitiveness, innovation, and productivity must anchor the next wave of expansion. Two high-level committees are already drafting proposals under the “Viksit Bharat” mission, with a focus on cutting the “cost of being honest” in business operations by simplifying rules and reducing regulatory burdens.The CEA stressed that future reforms would need to be a joint endeavour between government and private enterprise. He urged businesses to focus on innovation and efficiency rather than protectionist strategies, warning that sustainable growth must come from enlarging the economic pie, not redistributing it.India’s young workforce, he noted, will require not just employment but meaningful opportunities in a rapidly digitising economy. Policymakers and industry leaders must therefore strike a balance between accelerating technology adoption and generating jobs.