India’s growth holds, but foreign capital faces fresh headwinds: Finance Ministry

Uncertainty over trade relations with the United States and factors such as crude oil prices are affecting capital inflows into India, the Finance Ministry said in its monthly economic review.

The ministry said economic growth may moderate slightly, with GDP growth estimated to slow to 7.3 per cent in the July-August period, from 7.8 per cent in the April-June quarter. The report noted signs of a marginal slowdown in the pace of economic expansion.

The rise in oil prices in September and pressure on the rupee are among the key challenges facing the economy, the report said.

India cannot afford to become complacent on the back of the gains made in economic growth after the COVID-19 pandemic, the ministry said. The challenge is to sustain the growth momentum in every quarter, it added.
The report also noted that India faces stiff competition in attracting foreign capital.