India’s central bank governor warns of South Asian debt distress

India’s central bank governor has expressed concern over growing debt distress among regional trade partners and said he is alert to possible risks to his country’s economy from a global slowdown.

Shaktikanta Das said in an interview with the Financial Times that he was optimistic about India’s growth and financial stability despite the deteriorating global economic outlook. The IMF expects recession to affect one-third of the global economy this year, it said recently.

Analysts forecast that India will be a bright spot but the Reserve Bank of India governor said there was “no room for complacency”.

“Net-net, India is far better placed than almost all other countries,” he said. However, “the global challenges are building up”, he added, saying they “will have their spillovers and will have their impact on India”. 

Of India’s regional neighbours, Das said: “We are quite concerned about the debt distress in all these countries because we have a lot of trade relations with these countries. It’s a matter which we are looking at with a lot of interest.”

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