India’s economic growth has picked up momentum, indicating the recovery is “here to stay,” according to an economic advisor to India’s Prime Minster Narendra Modi.

After two consecutive quarters of contraction, India’s economy expanded by 0.4% year-on-year in the October-December quarter, according to data released from the National Statistics Office last Friday. That compared with revised contractions of 7.3% in July-September and 24.4% in April-June.

“I think on balance, I would say the recovery is here to say,” Anantha Nageswaran, a part-time member of the economic advisory council to the prime minister, said in an interview on CNBC’s “Street Signs Asia” on Monday. 

“Early indicators for January and February show that recovery has picked up momentum, and there is a continuation of what has happened in Q3,” he added.

India’s finance ministry said in a statement after the release of the GDP data, that the economy has returned to the “pre-pandemic times of positive growth rates,” which it said reflected a continued V-shaped recovery.

After reporting a significant drop in the number of Covid-19 cases for months, some Indian states have seen a sharp uptick in infections in February.

Still, Nageswaran is optimistic India’s economic progress will continue to gather pace as the country stands to gain from its “vaccine diplomacy,” which he said could boost business confidence.

“Overall, India’s vaccines rollout and export to other countries is an important step for India in reestablishing the confidence of global investors on its manufacturing capabilities,” he said, adding the strategy will also help to “cement India’s goodwill” among its neighboring countries.  

The Indian government has announced a vaccine diplomacy strategy, giving nearby countries millions of doses of the locally made AstraZeneca vaccine, even as its domestic immunization drive has just begun. India has supplied 15.6 million doses of the vaccine to 17 countries either through donations or commercial contracts, according to Reuters.

In an interview on CNBC’s “Squawk Box Asia” last week, JPMorgan’s chief emerging markets economist Jahangir Aziz, however, warned the Indian government could be underestimating the level of potential damage to the economy.

He cautioned that a major risk to India’s economic recovery is that millions of households and small businesses may potentially be cut off from the credit they need.

“The loss of income related to the coronavirus pandemic has run into billions of dollars on an annual basis, according to Aziz. “We know that the listed companies did not suffer that much, so, it has to be that the SMEs (small and medium enterprises) and the households took a much larger hit,” he said.