{"id":345607,"date":"2025-09-02T19:37:05","date_gmt":"2025-09-02T14:07:05","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=345607"},"modified":"2025-09-07T11:47:35","modified_gmt":"2025-09-07T06:17:35","slug":"the-external-shocks-and-a-way-out-for-india","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/the-external-shocks-and-a-way-out-for-india\/","title":{"rendered":"The External Shocks and A Way Out for India"},"content":{"rendered":"

Source: <\/strong>The post How to mitigate external shocks <\/strong>has been created, based on the article \u201cHow to Respond to External Shocks\u201d\u00a0 <\/strong>published in “Business Line\u201d on 2 September 2025. The External Shocks and A Way Out for India.<\/strong><\/p>\n

\"External<\/p>\n

UPSC Syllabus Topic: <\/strong>GS Paper- 2- Effect of policies and politics of developed and developing countries on India\u2019s interests<\/p>\n

Context:<\/strong> In the backdrop of the United States imposing steep tariffs on Indian exports in 2025<\/strong>, it has raised concerns about the vulnerability of India\u2019s economy particularly MSMEs and labour-intensive sectors to external shocks such as trade protectionism, global slowdowns, and liquidity disruptions.<\/p>\n

Challenges posed by external shocks<\/strong><\/h2>\n
    \n
  1. Disruption of trade flows due to tariffs and protectionist measures.<\/li>\n
  2. Disproportionate impact on MSMEs with low resilience and limited access to credit.<\/li>\n
  3. Pressure on employment in labour-intensive export industries.<\/li>\n
  4. Increased uncertainty leading to lower investment and consumption.<\/li>\n
  5. Risk of inflationary pressures if global commodity markets are disrupted.<\/li>\n<\/ol>\n

    Measures to respond effectively<\/strong><\/h2>\n
      \n
    1. Diversification of trade<\/strong>: Expanding trade across multiple countries to reduce overdependence on one market.<\/li>\n
    2. Credit support for MSMEs<\/strong>: Providing credit guarantees, interest subsidies, and restructuring of loans to maintain liquidity and prevent closures.<\/li>\n
    3. Domestic reforms<\/strong>: Simplifying regulations, improving land and labour markets, and encouraging infrastructure investment to boost competitiveness.<\/li>\n
    4. Counter-cyclical fiscal measures<\/strong>: Using targeted government spending to stimulate demand during slowdowns.<\/li>\n
    5. Monetary policy flexibility<\/strong>: Ensuring adequate liquidity while avoiding excessive credit misallocation.<\/li>\n
    6. Sustained infrastructure investment<\/strong>: Enhancing long-term productivity, job creation, and resilience against global headwinds.<\/li>\n
    7. Promoting R&D and innovation<\/strong>: Strengthening India\u2019s technological capabilities to move up the global value chain.<\/li>\n<\/ol>\n

      Question: <\/strong>India\u2019s economy is increasingly vulnerable to external shocks such as tariffs and global slowdowns. Discuss the challenges posed by such shocks and suggest measures India can adopt to mitigate their impact.<\/p>\n","protected":false},"excerpt":{"rendered":"

      Source: The post How to mitigate external shocks has been created, based on the article \u201cHow to Respond to External Shocks\u201d\u00a0 published in “Business Line\u201d on 2 September 2025. The External Shocks and A Way Out for India. UPSC Syllabus Topic: GS Paper- 2- Effect of policies and politics of developed and developing countries on… Continue reading The External Shocks and A Way Out for India<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":345850,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230],"tags":[12121,212,225],"class_list":["post-345607","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-9-pm-daily-articles","tag-businessline","tag-gs-paper-2","tag-polity","entry"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2025\/09\/External-Shocks-and-A-Way-Out-for-India.png?fit=1280%2C850&ssl=1","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/345607","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=345607"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/345607\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media\/345850"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=345607"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=345607"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=345607"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}