12 years of PM Modi: India should not only be resilient but also be antifragile

'If we're not at the table, we're on the menu.' When Canadian PM Mark Carney delivered this line at Davos this January, he didn't have India on his mind. But the one significant achievement of the last 12 yrs of this government has been to get India a seat at the high table with the big boys.

India is back to the classic 'risk vs uncertainty' dilemma. Today, we have reached a phase of extreme uncertainty, where the probability of understanding the consequences of events is an 'unknown unknown'. To face such uncertainty, our systems should not only be resilient but also be - to use Nassim Nicholas Taleb's term - antifragile. Which India is becoming.

Yet, on some fronts like ease of doing business, domestic competitiveness, jobs and exports, challenges remain. And it's in this context that Narendra Modi recently appealed to fellow Indians to moderate consumption, while GoI passed on a small sum of rising prices via fuel price hikes. Indeed, more may get passed on. Oil companies are losing about ₹1,000 cr every day, which is not sustainable. Modi's call should be seen as a transparent call to take citizens into confidence about a hostile external situation.


India enters mid-2026 with growth figures that reinforce its economic momentum. Economic Survey estimated FY26 GDP growth at 7.4%, powered by consumption and investment, and keeping India among the world's fastest-growing major economies for the fourth straight year. Real GDP growth for FY26 is estimated at 7.6%, revised up from 7.4%, marking India's strongest expansion since FY22.

Goldman Sachs forecasts real GDP growth of 6.9% in 2026 and 6.8% in 2027, both above consensus expectations. It also expects the US-India trade deal, easier financial conditions and healthier balance sheets to reduce uncertainty and gradually support a fresh cycle of private investment.

But why, despite years of low corporate tax rates, are corporates still not investing? Improving ease of doing business and tax issues are both works-in-progress. Yet, domestic investments are flat.

By March 2026, India's external position had improved materially. CAD narrowed to about 1% of GDP, a manageable level by historical standards. This points to stronger macro stability, even as it underscores the need for continued policy discipline in a more fragmented global environment.

Part of the improvement reflected favourable energy prices. Oil averaged $65-70 a barrel, keeping CAD near $45 bn in a $4-tn economy. But this support is fragile. If oil rises to $100, deficit could exceed $100 bn, or about 2.5% of GDP, sharply increasing India's financing needs.

India is highly exposed to any disruption in the Strait of Hormuz. A CAD once expected near 1% of GDP in 2025-26 could widen sharply. If crude averages about $85 this year, it may approach 2% of GDP.

India has attracted global capital well, largely through equity rather than debt. At current valuations, FPI is about $700 bn, and FDI about $800 bn, creating an external capital base of roughly $1.5 tn. But some of this capital can exit quickly, now that the era of easy US money is over and protectionist sentiment there is rising.

India's stronger reserves offer an important counterweight. In 2013, after the taper tantrum, it was grouped among the 'Fragile Five' over weak reserves. Today, it holds about $680 bn in net reserves, including more than $550 bn in cash, providing a valuable buffer.

Over the past 30 yrs, India's combined trade in goods and services has never recorded a surplus. 2012-13 was worst, when a $196 bn merchandise deficit and $65 bn services surplus produced a net deficit of $131 bn, or 7.1% of GDP. 2020-21 was best, when a $99 bn merchandise deficit and $89 bn services surplus narrowed the overall gap to $10 bn, or 0.4% of GDP.

Again, to paint this as something the Modi government has engendered is incorrect. Despite all the welfare schemes, India's fiscal deficit remains something to be envious about, through deft macroeconomic management and expenditure control.

In short, India has not recorded a surplus in combined goods and services trade in the past 30 yrs. Against the above backdrop, and an 'unknown unknown', fragile, anti-resilient, hostile external environment, Modi's leadership is going to be tested, as also the collective will of India.