NEW DELHI, Oct. 1 -- India's resilience to external shocks is being tested by a tougher global fight for capital, with unsettled trade ties with the US, the investment boom around artificial intelligence (AI) and a manufacturing push in developed economies all threatening to weigh on inflows, the finance ministry said on Thursday.

The country faces a "stiff challenge" in drawing capital flows amid external turmoil, like other developing economies, while short-term pressure on the rupee remains. The economy has shown it can absorb shocks, the ministry said, but the country it cannot afford to lower its guard or rest on its post-pandemic growth record.

Economic growth, therefore, has to be "earned every quarter", the ministry said in its ...