Pune, Oct 11 (PTI) India is poised to contribute about one-fifth of the world's GDP growth on the back of robust domestic demand and prudent macroeconomic and financial sector policies, which enabled it to withstand "external shocks", Shaktikanta Das, the Principal Secretary-2 to PM Narendra Modi, said.

Addressing an event here on Saturday, he emphasised that India's underlying priority in free trade agreement negotiations with the US and other countries is to secure fair and balanced agreements in the best interest of the Indian people.

"India continues to demonstrate remarkable dynamism and resilience amid an uncertain global environment", Das added.

Das delivered the 85th Kale memorial lecture on "Indian Economy in a changing global order" during the convocation at Pune-based Gokhale Institute of Politics and Economics.

Noting that the global economy was experiencing a phase of unprecedented uncertainty and fundamental reset, Das said the rules-based trading framework, promoting globalisation and free trade for over eight decades, is facing a challenge.

Das stated that the situation has changed from the days when it was considered that the world was flat and that it should become one market.

Cost competitiveness and the principles of comparative advantage across countries were supposed to be the guiding principles, but a fundamental change has crept in, he added.

"The situation has changed fundamentally. The global economy and trade have become considerably fragmented. Established rules are being increasingly questioned while new norms are yet to be firmly set in. The COVID pandemic and the Ukraine-Russia conflict have accelerated the move toward self-reliance," he said.

The former governor of the RBI said that the vulnerability in global supply chains has led many nations to rethink their external dependencies and give higher importance to supply chain resilience over cost efficiency.

"Strategic autonomy is now a top priority. This transformation is also evident in the growing influence of regional trade agreements, which reflect a shift towards more fragmented yet practical trade alliances. The year 2025, in a nutshell, is a pivotal year in terms of global economic trajectory.

Guided by a decade of structural reforms and strategic global positioning under the vision of "aatmanirbhar" Bharat, the nation has successfully weathered multiple global headwinds, Das added.

"The robust domestic demand, together with prudent macroeconomic and financial sector policies, has enabled the country to withstand many external shocks. India is now poised to contribute about one-fifth of the world's GDP growth", Das added.

He said India has been actively reshaping its trade engagements to align with the changing global order.

"India is a signatory to 14 free trade agreements (FTAs) and six preferential trade agreements (PTAs), with the UK, Australia, and the UAE being the recent additions among FTAs," he added.

Das said members of the European Free Trade Association (EFTA), including Iceland, Liechtenstein, Norway, Switzerland, and India, have signed a comprehensive Trade and Economic Partnership Agreement in March 2024.

"At present, India is in free trade agreement negotiations with the US, the EU, Peru, Oman, and New Zealand, among several others. The underlying priority of our trade negotiations is to secure fair and balanced agreements in the best interest of our nation and people," he added.

Amid a changing global trade, it is important to focus on the robust fundamentals that strengthen the Indian economy and the structural reforms that have strengthened these fundamentals.

"These factors have enabled India to navigate through the tumultuous world order," he said. PTI SPK NSK

India's economy relies on domestic demand and strategic trade negotiations to secure fair, resilient global trade ties. India's resilience to external shocks is attributed to robust domestic demand, prudent macroeconomic and financial sector policies, and structural reforms aimed at self-reliance. As global trade fragments, India prioritizes strategic autonomy and supply chain resilience, pursuing free trade and preferential agreements while negotiating additional FTAs to secure fair and balanced outcomes in the national interest.