RBI Deputy Governor Dr. Poonam Gupta: India Weathered Every Global Shock at Once — And Came Out Structurally Stronger

Quick Answer

Speaking at SBI's 13th Banking & Economics Conclave on September 23, 2026, RBI Deputy Governor Dr. Poonam Gupta argued that India has been hit by nearly every major global shock simultaneously — steep US tariffs, oil price disruptions, El Niño-linked agricultural risk, and AI-driven capital outflows — yet has still delivered 7.8% GDP growth in both 2025-26 and Q1 2026-27, anchored inflation, a fiscal consolidation path, and what she described as an increasingly resilient financial sector. Separately, discussing the Balance of Payments, she noted that recent oil and gold price shocks have pushed the current account deficit temporarily higher. She also addressed a "disconnect" between this real-economy strength and parts of the financial markets, particularly a rupee that has depreciated 13.1% on a point-to-point basis between March 31, 2025 and September 16, 2026, which she characterised as likely to prove temporary.

At a Glance: Key Data Points From the Speech

The Global Backdrop

Gupta framed the current environment as a continuation of structural pressures that have built up since the 2008-09 global financial crisis — the peaking of global trade, ageing societies, climate risks and stretched public finances — compounded first by the COVID-19 crisis of 2020-21 and then by a fresh set of shocks since 2022: back-to-back commodity and energy disruptions amid ongoing geopolitical conflicts, tariff-driven trade uncertainty, an El Niño event, and disruption linked to AI.

Her central claim was that India, unlike most peer economies that faced only a subset of these pressures, has faced all of them at once: among the highest US tariff rates imposed on any trading partner, exposure to oil-price shocks as a large net importer, agricultural risk from El Niño, and capital outflow pressure linked to global AI investment enthusiasm rather than any domestic AI-led upside.

How Policymakers Responded

Gupta set out four principles she said should guide a response to external shocks — clear communication and policy certainty, protecting both financial and macroeconomic stability, efficient use of available policy buffers, and continued structural reform regardless of pace — and argued Indian policymakers followed each of them.

Concrete measures she cited include the fast-tracking of multiple free trade agreements, diversification of export destinations, Goods and Services Tax (GST) rationalisation to support domestic consumption, and a broader set of front-loaded structural reforms.

The staged response to the energy shock

On the ongoing energy shock specifically, Gupta described a two-phase approach. Initially, when the underlying conflict was expected to be short-lived, the priority was securing adequate energy supply rather than passing costs on to consumers — avoiding the rationing seen in many other economies. Once it became clear that elevated prices would persist longer than expected, part of the price impact was passed through to consumers in a calibrated way, paired with encouragement (rather than mandated rationing) for households and firms to use constrained resources prudently.

Growth, Fiscal Position and Financial Stability

Gupta cited GDP growth of 7.8% in 2025-26, with a similar pace of 7.8% estimated for the first quarter of 2026-27. On the fiscal side, she referenced the IMF's April 2026 Fiscal Monitor, which projects India's gross public debt-to-GDP ratio declining from 83.4% in 2026 to 77.7% by 2031 — a fall of 5.6 percentage points — which she attributed to a combination of fiscal prudence and strong real and nominal GDP growth.

Note: the speech states the projected decline as "5.6 percentage points," while the underlying figures it cites (83.4% in 2026 to 77.7% in 2031) arithmetically work out to a 5.7 percentage-point decline. Both figures are reproduced here exactly as stated in the source.

On the financial sector, she pointed to the RBI's Financial Stability Report published in June 2026, whose stress tests she said indicate the sector is resilient and would remain so even under adverse conditions.

In her concluding remarks, Gupta characterised the economy as advancing on a resilient growth equilibrium of 7% or higher — broad-based across regions and sectors and underpinned by rising productivity — while working to break into a growth equilibrium of 8% or higher.

The Bond–Equity Market "Disconnect"

Gupta drew a distinction between how bond and equity markets have responded to this narrative. She characterised the bond market as having performed well, both against its own history and relative to other countries, crediting fiscal commitment, the prospect of improving fiscal outcomes from sustained high growth, and monetary policy credibility. She referenced an Economist commentary from September 2026 that linked orderly bond markets to disciplined public finances and independent central banking.

Equity markets, in her account, have not tracked the same optimism, which she linked partly to a more prominent AI-led growth story unfolding in certain other economies — even though Indian equities had their own strong run roughly between June 2022 and September 2024. She expressed the view that the promise of the underlying real economy would eventually reassert itself in equity valuations.

Balance of Payments and the Rupee

India has traditionally combined a small current account deficit with a larger capital account surplus, producing a net positive Balance of Payments (BOP).

Gupta added that India's CAD as a share of GDP has declined over time, adding resilience to the BOP, and that CAD levels have remained far below the levels generally considered prudent for emerging market economies.

Recent oil and gold price shocks pushed the CAD temporarily higher, and in the last two years the capital account surplus has fallen short of the CAD — producing a negative BOP of roughly US$5.0 billion in 2024-25 and roughly US$23.6 billion in 2025-26. Against this backdrop, the rupee has cumulatively depreciated 13.1% on a point-to-point basis between March 31, 2025 and September 16, 2026.

Looking ahead, Gupta expects the CAD to shrink further as oil dependence declines and merchandise exports continue to benefit from recent free trade agreements, and she expects the capital account to turn more favourable later in the current financial year — citing stretched valuations elsewhere, cooling AI-related investment enthusiasm, strong domestic fundamentals, a recovering investment cycle, healthy bank and corporate balance sheets, continuing measures to attract a variety of capital into the country, rising FDI, and the prospect of further inclusion of Indian bonds in global indices. She described AI specifically as an "unspent force" for India, arguing the country will leverage AI's potential going forward much as it has leveraged digital innovation previously, while working to avoid the associated risks.

Frequently Asked Questions

Who delivered this speech and where?
Dr. Poonam Gupta, Deputy Governor of the Reserve Bank of India, delivered it as a special address at SBI's 13th Banking & Economics Conclave on September 23, 2026.

What was India's GDP growth rate according to the speech?
7.8% in 2025-26, with a similar 7.8% pace estimated for the first quarter of 2026-27.

How much has the rupee depreciated, per this speech?
13.1% on a cumulative, point-to-point basis between March 31, 2025 and September 16, 2026.

What was India's Balance of Payments position in 2025-26?
Negative by approximately US$23.6 billion, following a negative BOP of approximately US$5.0 billion in 2024-25.

Why does the speech say equity markets have lagged bond markets?
Gupta attributed this partly to a more prominent AI-led growth narrative playing out in certain other economies, drawing capital away from Indian equities even as bond markets have performed comparatively well.

Does this speech represent a new RBI policy or regulation?
No. It is a Deputy Governor's address setting out her own analysis and views on the economy; it does not itself create, amend, or announce any binding regulatory requirement.

CorpLawUpdates Analysis

For finance and treasury teams, the more actionable thread in this address is less the growth narrative — which is broadly consistent with recent RBI commentary — and more the explicit BOP and currency data: two consecutive years of negative BOP, a cumulative double-digit rupee depreciation, and a Deputy Governor publicly characterising that depreciation as an "overcorrection" likely to reverse. Businesses with foreign-currency exposure, import-dependent cost structures, or hedging programmes tied to rupee assumptions may want to read Gupta's BOP outlook — a narrowing CAD and a capital account turning favourable "later this financial year" — as a view to monitor against actual RBI and Ministry of Finance data releases, rather than as a guarantee of near-term rupee appreciation.

Source Note

Source: "The Indian Economy in an Ever More Volatile and Complex World" — Special Address by Dr. Poonam Gupta, Deputy Governor, Reserve Bank of India, at the 13th SBI Banking & Economics Conclave, September 23, 2026. The speech acknowledges inputs from Somnath Sharma, Asish Thomas George, GV Nadhanael and others. Referenced within the speech: IMF Fiscal Monitor (April 2026); RBI Financial Stability Report (June 2026); The Economist, "What is causing the global bond sell-off?" (September 8, 2026); Speech by Dr. Poonam Gupta at the 14th CDS Foundation Day Lecture (February 20, 2026); Keynote Address by Governor Sanjay Malhotra at the 25th FIMMDA-PDAI Annual Conference (May 1, 2026).

This article summarises the views expressed in an official RBI address for informational and educational purposes only and does not constitute investment, legal, or regulatory advice. Readers should verify figures against RBI's official publication of the speech before relying on them.