India faces heightened geoeconomic risks as the U.S. exits its unconventional monetary policy and the value of the dollar appreciates against major currencies. We can mitigate the risks with a multilateral safety net to provide liquidity, and by attracting FDI through the ‘Make in India’ programme.
New geoeconomic risks are threatening global economic stability and India will have to craft a crisis response plan as these risks—arising in the developed world—start unfolding.
The first risk to the global economy is the tightening grip of deflation in various rich countries—the U.S., UK, members of the European Union, and Japan—while inflation persists in the emerging economies.