Economic Survey 2025: Major global challenges faced by Indian economy

The Economic Survey, released on Friday, January 31, indicated that India's export growth and manufacturing would face challenges due to global economic uncertainties, particularly in Europe and China.

“A notable trend was the slowdown in global manufacturing, especially in Europe and parts of Asia, due to supply chain disruptions and weak external demand,” stated the Economic Survey.

Additionally, major global challenges such as the Russia-Ukraine conflict, Israel-Hamas war, cyberattacks, and geopolitical risks around trade policies have also impacted the Indian economy, stated the Economic Survey.

Economic Survey 2025: Major global challenges faced by Indian economy

Here's a look at the global challenges impacting the Indian economy:

1.Russia-Ukraine, Israel-Hamas conflicts

Major global events such as the Russia-Ukraine and Israel-Hamas conflicts impacted energy and food security, leading to higher prices and rising inflation, stated the Economic Survey.

2. Cyberattacks

The Economic Survey 2024-2025 stated that cyberattacks became more frequent and severe, with grave financial consequences due to the increasing digitisation of critical infrastructure.

According to the Global Financial Stability Report 2024 released by the International Monetary Fund (IMF), the number of cyberattacks has doubled since the COVID-19 pandemic, with nearly one-fifth of all cyber risks affecting financial firms.

3. Geopolitical risks around trade policies

According to the Economic Survey, geopolitical tensions have reshaped global trade. “Geopolitical risks and policy uncertainty, especially around trade policies, have also contributed to increased volatility in global financial markets,” stated the Economic Survey 2025.

However, despite the global challenges, India’s real GDP is estimated to grow by 6.4 per cent in FY25, stated the Economic Survey. The survey also added that growth in the first half of FY25 was supported by agriculture and services, with rural demand improving on the back of record Kharif production and favourable agricultural conditions.

Although the manufacturing sector faced pressures due to weak global demand and domestic seasonal conditions, private consumption remained stable, reflecting steady domestic demand. Fiscal discipline and a robust external balance, bolstered by a services trade surplus and strong remittance growth, have contributed to macroeconomic stability, reported the Economic Survey 2025.