Despite strong fundamentals, India’s economy has major vulnerabilities stemming from its external account. With energy flows contested, shipping routes under threat, and capital markets increasingly shaped by geopolitics, the country must leverage its relative strength to weather current shocks and build long-term resilience.
NEW DELHI—Indian Prime Minister Narendra Modi’s appeals for Indians to adjust their consumption habits have been described as “austerity.” But cutting back on gold purchases, using public transport, limiting overseas travel, working from home, and even cutting down on cooking oil is not general belt-tightening. It is a targeted defense of India’s external account at a moment of profound disruption.