Union Minister of Finance and Corporate Affairs Nirmala Sitharaman delivers the keynote address on 'India's Economic Resilience and Prospects Amidst a Challenging and Uncertain Global Environment' at Columbia University, in New York, Monday, October 21, 2024.
Credit: PTI Photo
New York: The global economic environment may present challenges but India is well positioned to capitalise on new growth opportunities, Finance Minister Nirmala Sitharaman has said, underlining that as nations re-evaluate their supply chains, India hopes to become a key partner for many countries seeking to diversify their sources of goods and services.
Sitharaman made these remarks on Monday while delivering a special lecture on ‘India’s Economic Resilience and Prospects Amidst A Challenging and Uncertain Global Environment’ at Columbia University here.
She said that India is looking towards boosting domestic capacities, and building resilience against external shocks.
“While the past decades saw global growth led by broad multilateral trade, the coming years, I think, will likely be defined by strategic economic partnerships and India is very well poised to take advantage of this transition.” She said that the global economic environment may present challenges, but “India is well positioned to capitalise on new growth opportunities.
“The shift towards a more fragmented global economy, characterised by redefined alliances and changing trade patterns, could in fact work to India's advantage. As nations re-evaluate their supply chains, India hopes to become a key partner for many countries seeking to diversify their sources of goods and services,” she said at the lecture organised by the Deepak and Neera Raj Center on Indian Economic Policies at Columbia’s School of International and Public Affairs.
Sitharaman arrived in New York Sunday from Mexico where she had chaired the Tech Leaders Roundtable in Guadalajara. She had also visited the TCS headquarters in Guadalajara.
In New York, she addressed a Roundtable on 'Investment Opportunities in India' at the New York Stock Exchange and participated in a fireside chat on India’s decadal economic reforms and economic growth with IBM Chairman and CEO Arvind Krishna.
From New York, Sitharaman will head to Washington DC to participate in the Annual Meetings of the International Monetary Fund (IMF) and the World Bank, the 4th G20 Finance Ministers and Central Bank Governor (FMCBG) Meetings, besides the G20 Joint Meeting of FMCBGs, Environment Ministers, and Foreign Ministers; and G7 – Africa Ministerial Roundtable.
Sitharaman noted that it may be an understatement that “we are living through times of profound uncertainty, which is steadily rising before us.
“The world today grapples with multiple challenges, such as the conflict in the Middle East and between Russia and Ukraine. There's also a possibility of other destabilising events such as the dollar liquidity shocks, increases in global tariffs due to trade wars and oil price shocks - all at the same time. In addition to these events, the emergence of a veritable China terms of trade, and that as a shock, has made it necessary for countries to take measures to safeguard their domestic production,” she said.
Sitharaman stressed that despite an increasingly complex global environment, India's macro-economic fundamentals remain “sound", acting as a strong foundation upon which to build future growth.
She said that in 2013, India was the 10th largest economy and presently, it is the fifth largest economy.
The International Monetary Fund has projected it to become the third-largest economy by 2027. “India's contribution to global growth is projected to see an increase of 200 basis points in the next five years,” she said.
She further stressed that India's trade policies have also undergone significant reform, with a focus on facilitation and greater integration with key economic partners. India is fostering a more competitive and export-oriented economy by pursuing free trade agreements with nations like the UAE and Australia, alongside initiatives such as the Production Linked Incentive schemes and One District One Product schemes.
“Furthermore, India must continue to strengthen its position in the geopolitical landscape. As the world undergoes a realignment of power dynamics, emerging economies like India would need to navigate complex international relationships. This would require a nuanced approach to diplomacy where economic interests are balanced with strategic concerns,” she said adding that as countries look inwards, globally there is the added risk of regress towards de-industrialisation.
She said India's rise in the Global Innovation Index and its growing influence in sectors like high-end capital goods, renewables and pharmaceuticals, signal its potential to become a vital player in global markets.
“Another vital aspect of the policy agenda has been the strengthening of India's financial sector. The soundness of our banking system marked by low levels of NPAs (nonperforming assets) and enhanced provisioning for bad loans reflects the reforms we have undertaken to improve asset quality,” she said.
She added that by 2047, as India celebrates 100 years of independence, “we will have a chance to define a new era of prosperity, not just for our own citizens, but for the global community as well.
“India's role in the world is expanding, and we stand ready to engage constructively with the international community, sharing our innovations and contributing to global peace and prosperity,” she said, as she cited the example of the COVID-19 pandemic during which India supplied vaccines developed and manufactured by it to nations across the world.
“The coming decades will be defined by how effectively India manages its demographic dividend, strengthens its global partnerships, and navigates the complexity of a rapidly changing world. While there are challenges ahead, there are also abundant opportunities for India to lead the way, not just in economic terms, but in shaping the global discourse on technology, sustainability, and inclusive growth,” she said.