Indian Finance Minister Nirmala Sitharaman emphasized the government’s focus on maintaining strong domestic demand to ensure the underlying strength of the Indian economy. This comes amid concerns that US tariffs could lead to a global slowdown, which has also prompted the Reserve Bank of India (RBI) to lower its forecast for the current fiscal year. Sitharaman welcomed the RBI’s latest rate cut, stating that the Indian economy would require support from both the central bank and her ministry to maintain growth in the face of global uncertainties induced by US tariff hikes.
The finance minister highlighted that the government has made policy decisions and budget announcements to stimulate growth, and the latest rate cut is seen as a welcome move. She emphasized that the Indian economy is largely driven by domestic demand and consumption, and is less dependent on global trade. Additionally, she mentioned that the government is studying US tariffs and pursuing an ambitious trade agreement with the US, which can benefit both countries.
Sitharaman’s comments aim to reassure investors and clarify the government’s stance on the potential impact of US tariffs on the Indian economy. By prioritizing domestic demand and consumption, the government hopes to maintain the economy’s underlying strength and insulate it from the effects of global trade tensions. The finance minister’s words are likely to be viewed as a positive signal by investors, as they highlight the government’s commitment to supporting the economy and maintaining growth despite the challenges posed by US tariffs.