Finance Minister Nirmala Sitharaman on Monday said that India’s economy continues to remain resilient and climate-positive, even as global uncertainties pose challenges. She noted that high-frequency economic indicators reflect strong and broad-based domestic demand, while most pressures confronting the country stem from external factors.
Speaking at the 37th foundation day of Small Industries Development Bank of India, Sitharaman said the government has adopted a carefully calibrated policy approach to cushion citizens and businesses from shocks, extend support to MSMEs and exporters facing working capital constraints, and sustain the country’s growth momentum.
Referring to Prime Minister Narendra Modi’s appeal to conserve foreign exchange, the finance minister explained that the message should be seen through the lens of three critical areas—fuel, fertiliser and foreign exchange.
She pointed out that crude oil prices remain volatile, fertiliser costs have risen sharply, and elevated gold prices are adding pressure on the external sector. “All these payments have to be made in foreign exchange, which makes prudent management essential,” she said.
Confidence Through Policy Action
Stressing the importance of maintaining public confidence, Sitharaman said the government is reinforcing trust through both communication and concrete policy measures. She added that India continues to demonstrate economic strength and that the government remains open to reviewing suggestions for further action, should the need arise.
Highlighting positive trends, the finance minister said private sector investment is gaining momentum, GST collections are rising, formalisation of the economy is deepening, and infrastructure activity remains steady nationwide. Warning against fear-driven narratives, she said GST revenues—an important indicator of economic activity—have stayed robust even after rate rationalisation, crossing ₹22 lakh crore in 2025–26.
Sitharaman noted that gross revenues grew 8.3% year-on-year, a significant achievement amid global uncertainty. She also cited strong early indicators for FY27, with domestic wholesale tractor sales up 26%, passenger vehicle sales rising 25%, two-wheeler and three-wheeler sales increasing 28% and 32% respectively, and new life insurance business premiums jumping 39%. A healthy banking system, she said, continues to underpin India’s growth trajectory.
Prepared for Global Shocks
The finance minister revealed that the government had already earmarked over ₹1 lakh crore for an economic stabilisation fund well before disruptions such as the Strait of Hormuz blockade. This pre-emptive provision, she said, was created to ensure India could respond swiftly to unforeseen global events, supply chain disruptions, or sudden sectoral stress.
Call to Adapt in a Changing Trade Landscape
Sitharaman also cautioned against rising global protectionism and urged the textile industry to adapt to an increasingly uncertain international trade environment where rules are evolving rapidly.
Addressing an event organised by the Cotton Textiles Export Promotion Council, she said India is pursuing free trade agreements to improve market access for exporters, even as several countries impose non-tariff barriers. These include strict sustainability norms, supply chain due diligence requirements, and carbon border adjustment mechanisms introduced by advanced economies.
She said Indian exporters must adapt quickly to these changes to remain competitive, acknowledging that some global rivals operate under less stringent conditions.
The finance minister noted that global retailers such as H&M, Zara, and Marks & Spencer are increasingly embedding sustainability criteria into their sourcing strategies. Assuring full government support to the sector, Sitharaman urged textile and garment manufacturers to take pride in their centuries-old legacy, which has thrived long before the era of subsidies.
