Finance Minister Nirmala Sitharaman on India’s growth path amid volatility: We will navigate global disruptions with policy agility, long-term vision | Business News #IndiaFinance

“The intensification of tariff wars and the rise of protectionist policies have the potential to disrupt global supply chains, increase production costs and create uncertainty in investment decisions across borders as well. India is confident that it will navigate these global disruptions with policy agility and long-term vision,” Sitharaman said.

On April 2, US President Donald Trump announced reciprocal tariffs on major economies, including India. The tax announcement had a ripple effect on financial markets across the globe, including Indian markets. However, after Trump gave a 90-day relief, domestic markets recovered all the losses incurred immediately after the tariff announcement.

Sitharaman said that despite the recent global uncertainties, India’s financial markets have shown remarkable resilience. Testament to this is that in the second half of March 2025, foreign portfolio investors made substantial investments in India’s financial sector, channeling over Rs 17,500 crore into financial stocks, she said.

At the same time, DIIs, the domestic institutional investors, in the last financial year, recorded total inflows of Rs 6.1 lakh crore, far outpacing the Rs 1.3 lakh crore net outflows from FDIs.

“This transition of DIIs from a supporter to a dominant force underlines the growing maturity and depth of India’s capital market,” she said.

Strong economic fundamentals withstand VUCA

Sitharaman said that the world currently is full of volatility, uncertainty, complexity and ambiguity (VUCA) which is shifting every day.

“One thing stands firm — the strength of the Indian economic fundamentals and the macroeconomic prudence with which the economy is being managed,” she said.

India’s focus remains firmly on building a robust domestic foundation and the foundation is laid and strengthened through infrastructure development, inclusive growth and deeper regional cooperation.

“These are not just buffers to external shocks, but accelerators for our long-term growth aspirations,” she said.

Driven by a strong regulatory architecture and by enabling reforms such as dematerialisation, trading plus one (T+1) trading settlement cycle, direct market access and mutual fund penetration, the country has built one of the most robust market infrastructures in the world, the minister stated.

In FY2025, market capitalisation of Indian stock markets crossed $5 trillion market for the first time, making it the fifth largest capital market globally. In the past five years, domestic indices have delivered 131 per cent dollar-adjusted return, which is the highest among global peers.

Sitharaman also lauded retail investors that have placed their faith in the domestic stock markets.