The resilience of the economy and strength of domestic demand will continue to make India an engine of growth amid the rapidly evolving global trade landscape as a result of US tariffs, Finance Minister Nirmala Sitharaman said in London on Tuesday. In an interaction entitled the ‘Opportunities and challenges for India’s quest to become a developed economy by 2047’ at the High Commission of India in London at the start of her first UK visit in her current Union Cabinet term, the minister said that the economy was well placed to capitalise on domestic efficiencies and competitiveness as it tackles global headwinds. She also expressed her optimism over the successful conclusion of the India-UK FTA negotiations “sooner rather than later”, along with a Bilateral Investment Treaty.
“The world has seen depressed growth for over several years, earlier it was low interest for long and now it’s going to be low growth for long, and that’s not happy news for anybody,” said Sitharaman. “India has maintained its fastest growing economy tag continuously now for five years and we still think that momentum may moderate a bit, but it will still be India who will keep that growth… as our growth gets calibrated because of the consumption which exists domestically. “It is backed by demand for global-standard goods and that is why globalisation since the 1990s has given India many opportunities,” she said.
“So, at a time when trade is going to be influenced by tariffs, measures which the US government is taking, we still will have to make sure that the strength that India has in domestic demand as a big magnet which can attract global supplies must be sustained and boosted,” she noted. The minister said the strength of this demand would prove attractive for FDI and international manufacturing to supply for the domestic market and also export from India. “We think India, and a few emerging markets, are going to be the engines of growth. The global depressed growth, if it has to pick up, will have to be because of these engines,” she said.
She admitted that given the global interconnectedness, the Indian economy is not isolated from the global risks and challenges arising due to geopolitical tensions, trade disruptions and financial market volatility. “Navigating these headwinds requires strategic policy interventions with a strong emphasis on strengthening domestic capabilities and capacities.
“In this phase of a rapidly evolving global policy landscape, with a number of imponderables, the government’s conviction is that the most effective path to building economic resilience is to foster domestic efficiencies and competitiveness,” she said.
During an interaction session with Lord Nicholas Stern and NK Singh — co-chairs of the London School of Economics (LSE) India Advisory Board — the minister went on to reflect upon a shift away from multilateralism towards greater bilateralism.
