Diversify Now: India Needs to Expand Its Trading Base to Overcome Global Headwinds, Pg 6

1. India’s Economic Momentum

   	-   Services PMI rose to 59 in February (from **56.5 in January), indicating strong sectoral growth.
   	-   **Manufacturing PMI fell to a 14-month low (56.3 in February)**, reflecting global slowdown concerns.
   	-   **Q3FY25 GDP growth (6.2%)** confirms economic resilience despite capital outflows.
   

2. Challenges for India’s Trade & Growth

   	-   Reciprocal tariffs by the US (effective April 2) threaten **India’s manufacturing exports**.
   	-   The AI revolution is reshaping the services sector, reducing IT earnings and disrupting **hiring & training models**.
   	-   NASSCOM’s 2025 Strategic Review cites **geopolitical instability & tariff hikes** as key trade barriers.
   

3. IT Sector Growth Concerns

   	-   **India’s IT industry (16% annual growth)** faces a slowdown, with growth projections at 5.1% in FY25 (down from 3.8% in FY24).
   	-   **$283 billion IT sector valuation expected in FY25**, despite AI-driven disruptions.
   

Analysis & Way Forward

• India must diversify its trade base to reduce dependency on the US & EU markets.
• Strengthening AI upskilling programs** will **ensure workforce adaptability.
• Negotiating trade pacts can mitigate tariff risks & secure stable export markets.

Mains Mock Question:

"How can India balance its economic growth amid global trade disruptions and technological shifts? Suggest policy measures for resilience."