Union Finance Minister Nirmala Sitharaman on Friday inaugurated the fourth Kautilya Economic Conclave (KEC 2025) in New Delhi. In her address, the finance minister called for deeper dialogue to address systemic imbalances as the world continues to face geopolitical uncertainty.
The three-day event, themed ‘Seeking Prosperity in Turbulent Times’, will close with an address by External Affairs Minister S Jaishankar on Sunday.
In her address, Sitharaman stated that the global economy is undergoing a “structural transformation” rather than just a temporary disruption.
“Trade flows are being reshaped, alliances are being tested, investments are being rerouted along geopolitical lines, and shared commitments are being re-examined,” she said, adding that the foundations of the international order are being reset.
The finance minister said developing economies face “profound trade-offs” between energy transition and energy security, growth and sustainability, innovation and labour markets, and high borrowing costs versus investment needs. She also warned that strategies like de-risking and de-coupling are reshaping globalisation, creating long-term distortions across trade, finance, and energy.
Pointing to Asia’s economic journey, Sitharaman noted that several nations have benefited from globalisation without adopting Western political models. They are now pursuing alternative paths for growth and governance, she said.
Against this backdrop, Sitharaman positioned India as a stabilising force, stating, “Our growth is firmly anchored in domestic factors, which minimises the impact of external shocks. As a result, the Indian economy is resilient, continues to grow sustainably.”
India’s economy grew 7.8 per cent year-on-year in the first quarter of the financial year 2025-26 (FY26), supported by manufacturing and services growth.
In its latest Monetary Policy Committee meeting on Wednesday, the Reserve Bank of India (RBI) revised its GDP growth forecast for FY26 to 6.8 per cent, up from 6.5 per cent earlier. RBI Governor Sanjay Malhotra cited strong rural demand from a favourable monsoon and improving urban consumption for the revision. Inflation is projected at 2.6 per cent for the same year.
The finance minister's remarks come as India continues to navigate its trade relations with the United States. The US government, led by President Donald Trump, imposed an additional 25 per cent tariff on certain Indian exports, effectively doubling the total duty to 50 per cent. Trump cited India's continued import of Russian crude oil, critical for domestic energy needs, as the reason for the penalty.
India exported $86.5 billion worth of goods to the US last year and while not all shipments are affected, key sectors such as textiles, gems and seafood have come under pressure.
However, trade talks have resumed within the two nations. Chief Economic Adviser V Anantha Nageswaran, speaking in Kolkata last month, said he expected tariff discussions with Washington to be resolved within two months, potentially lowering reciprocal duties to 10–15 per cent. He also noted that despite the trade headwinds, “we won’t be surprised if growth is again 7 per cent year-on-year in the second quarter”.
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At home, the government tried to cushion the impact of the Trump tariffs. The Goods and Services Tax (GST) structure was rationalised last month, dubbed GST 2.0, with cuts on consumer items such as soaps, toothpaste and small cars. The new system gets rid of the 12 and 28 per cent tax slabs. Essential items are now taxed at 5 per cent, most goods and services at 18 per cent, luxury and sin items at 40 per cent, and vital items like life-saving medicines and insurance are exempt.
The move is expected to cost federal and state governments ₹48,000 crore in tax revenue as the Centre aims to stimulate demand. GST 2.0 was rolled out just as India’s festival season kicked off, the peak period for retail sales.
Concluding her address, Sitharaman said developing nations cannot afford to remain “passive spectators” in a world where decisions elsewhere shape their destinies. “Our choices will determine whether resilience becomes a foundation for leadership or merely a buffer against uncertainty,” she said.
She urged participants to see the current moment as a turning point. “Let us treat this moment not only as a crisis but as an inflexion point. Let us converse not only about what future awaits us but also about the contours of the future we wish to create.”
First Published: Oct 03, 2025, 18:43
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