FM, RBI guv see India as global anchor amid flux

Local consumption, strong fundamentals position India as stabilizing global force

- Rhik Kundu

India's finance minister and the central bank governor struck a note of reassurance and confidence in the country's economic prospects amid global convulsions driven by geopolitical pressures, fractured trade, and shifting alliances.

Speaking at the fourth Kautilya Economic Conclave in New Delhi on Friday, finance minister Nirmala Sitharaman said the era of globalization and open markets that shaped the post-Cold War order appears to have become "a relic of the past".

Noting that global trade flows, capital markets, and alliances are being increasingly redrawn along geopolitical lines, the finance minister said, "The question is what lies on the other side of this transformation, and on what terms."

Sitharaman positioned India as a stabilizing force in the current turbulent landscape, driven by domestic consumption, investment, reforms, and inflation management that have shielded growth from external shocks. Speaking at the same event, Reserve Bank of India (RBI) governor Sanjay Malhotra echoed the theme of resilience, noting that India has distinguished itself as a rare anchor of stability despite global turbulence.

The remarks come amid escalating trade frictions, with the US imposing a 25% tariff on nearly all Indian exports in early August, followed later that month by another 25% duty in response to discounted Russian oil purchases.

Washington has also announced a 100% tariff on imported patented pharmaceuticals unless production facilities are set up in the US, a move expected to weigh on India's trade data from October.

Global conflicts, from Ukraine to the Middle East, further threaten to push energy costs higher for India, which relies heavily on imports.