New Delhi, May 12 -- From Liberation Day tariffs to a war in West Asia, the global economy is going through its sharpest test in years. India faces rising oil prices, a stretched current account and an ambitious 2047 growth target, all at once. India, thankfully, has the tools to respond appropriately.

The world today is more uncertain than at any point since the covid pandemic. The Daily Trade Policy Uncertainty Index, a barometer of global economic anxiety, has surged to levels not seen since 2020, driven by two successive waves of US tariffs, conflict in Eastern Europe, the Israel-Gaza war and a flare-up in West Asia since February.

For an economy as well integrated into global trade and energy markets as India, both the challenges a...