A strong rupee.

"Commerce and industry minister Piyush Goyal on Sunday said that India wants to capture the world markets in all sectors and the country would 'very soon' become a $30 trillion economy from the level of $3 trillion at present," ET. "According to the data, the growth in GDP at constant prices (2011-12), also known as real GDP, during FY 22 (1 April 2021-31 March 2022), is estimated to attain a level of INR 147.36 trillion (US $1.90 trillion), as against First Revised estimate of INR 135.58 trillion (US $1.75 trillion) for FY 21," India Briefing. However, nominal GDP, which is not adjusted for inflation, "is estimated to attain a level of INR 236.65 trillion (US $3.05 trillion)". "Goyal said that if India grows at 8% every year on a Compounded Annual Growth (CAGR) basis," "In 27 years from now, the economy growth can be calculated as $26 trillion and after 30 years, it can confidently be put that India will be a $30 trillion economy." How smoothly the minister goes from "if" to "confidently" is commendable. "In 2022, the IMF projects India's $3.53 trillion economy to overtake Britain's $3.38 trillion," NIE. By 2027, India will be in fourth place with $5.53 trillion, higher than Britain's $4.55 and Germany's $5.36 trillion. "The impending growth slowdown in the United States is set to hamper the growth trajectory of India in the medium term, analysts say," ET. "The US constitutes around 18% of India's merchandise export market and over 60% of India's IT-ITeS exports." "Nomura expects India's GDP growth to average 7.2% on an annual basis in 2022 and moderate to 5.4% in 2023, with risks to the downside." "India faces near-term challenges which need to be managed carefully without sacrificing hard-earned macro-economic stability, the finance ministry said in its monthly economic report. It asserted that the country faces a low risk of stagflation," ET. "Almost a year back, the trading index for the US dollar was near 92. However, today, it is trading at 105, which is a 14 percent YoY growth," ET. The rupee has fallen from 73-74 to the dollar, to about 79 today, "a depreciation of 7 percent on a YoY basis". Which means that the US dollar has appreciated 14% against other currencies but only 7% against the rupee. "India's real effective exchange rate, measured by the 40-currency basket favoured by the RBI, is overvalued by 4%," agreed SSA Aiyar. "Most developing countries are conserving their reserves to meet the coming crisis. But the RBI has run down its foreign exchange reserves from a peak of $640 billion in 2021 to $596 billion today. By selling dollars, the RBI has checked the rupee from sliding faster." The RBI is trying to control inflation by lowering the cost of imports through a stronger rupee. RBI's Monetary Policy Committee (MPC) member Jayanth R Varma said that "it should be ensured that there is no 'intolerable growth sacrifice' in attempts to tame inflation 'too abruptly'," ET. "One hopes the RBI is not under political pressure," wrote Aiyar. No pressure. Just obeying orders.