Finance Minister Nirmala Sitharaman has lauded India’s ability to withstand global economic shocks, stressing that the country’s resilience is the result of deliberate policy choices and structural reforms rather than mere chance.
Speaking at the Foundation Day of the Bank of Maharashtra in Pune on Thursday, Sitharaman highlighted that proactive fiscal and monetary policies, large-scale infrastructure development, improved governance, and digital transformation have played a crucial role in strengthening the economy.
She noted that India recorded an average annual growth of nearly 8% between 2021–22 and 2024–25, making it the world’s fastest-growing major economy. In the April–June 2025 quarter, GDP expanded by 7.8%, reflecting sustained momentum.
“This resilience is not accidental at all. It reflects a decade of proactive reforms, infrastructure creation—both physical and digital—enhanced competitiveness, and better governance,” Sitharaman said.
Global Challenges and U.S. Trade Tensions
Despite strong fundamentals, Sitharaman acknowledged India faces risks from global uncertainties. Geopolitical tensions, supply chain disruptions, and protectionist trade policies continue to pose challenges.
She pointed to recent U.S. measures, including a 50% tariff imposed by President Donald Trump on Indian goods such as textiles, gems, jewellery, and footwear, along with tighter immigration rules impacting the IT and services sector.
Even so, Sitharaman emphasized that India’s domestic demand, low inflation, and robust foreign exchange reserves provide a buffer against external volatility.
Credit Ratings Upgraded
Underscoring global confidence in India’s economy, she noted that international rating agencies have upgraded India’s sovereign credit ratings. On 14 August 2025, S&P Global Ratings raised India’s long-term sovereign rating from BBB- to BBB, the first such upgrade in 18 years. Morningstar DBRS and Japan’s R&I also upgraded India earlier this year.
These upgrades were attributed to strong economic growth, disciplined fiscal management, and efficient government spending.
Inflation and Growth Outlook
According to the Ministry of Statistics, India’s retail inflation rose to 2.07% in August, up from 1.61% in July. Chief Economic Adviser V. Anantha Nageswaran recently stated that growth this fiscal year is expected to be near the upper end of the 6.3–6.8% range, supported by tax reforms and steady demand.
Banking Sector Revival
Turning to the financial sector, Sitharaman highlighted the progress made since the twin balance sheet crisis of 2013–14, when both banks and corporates were under severe stress. She credited reforms such as the Insolvency and Bankruptcy Code (IBC), RBI-led corrective measures, and stronger bank management for restoring stability.
She urged banks to innovate and expand credit, especially for MSMEs, which are critical for job creation and industrial growth. “As India’s economy grows, so does the demand for credit and innovative financial products,” she said.
Youth and Financial Trust
Sitharaman also underlined the importance of winning the trust of India’s youth. “When we speak of our demographic dividend, banks must ensure grievance redressal, systemic corrections, and customer confidence. Trust of the younger generation will define the future of financial institutions,” she added.
Jyoti Gupta