India’s Finance Minister Nirmala Sitharaman emphasized the resilience of the national economy amid global uncertainties, reaffirming the government’s commitment to boosting capital expenditure to sustain growth. Speaking at the Economic Conclave hosted by the finance ministry, she highlighted that domestic demand and investment continue to anchor economic expansion, reducing vulnerability to external shocks.
The Indian economy grew by 7.8% year-on-year in the April–June quarter, marking the fastest pace in five quarters, up from 7.4% in the previous period. For the full fiscal year ending March 2026, growth is projected at 6.8%, despite mounting concerns over international trade tensions.
As part of the federal budget, the government plans to allocate a record 11.21 trillion rupees ($126.3 billion) to infrastructure development. This slight increase from the prior year’s spending underscores efforts to stimulate long-term economic activity through public investment.
Recent developments have added pressure, including the United States’ decision to double tariffs on Indian exports—raising them to as much as 50% starting August 27—citing continued Indian imports of Russian oil. Economists warn this could negatively affect key export sectors such as textiles, leather goods, and chemicals.
The Reserve Bank of India maintained its benchmark interest rate at 5.5% in its latest policy meeting, while indicating potential room for a cut in December. The central bank will assess the impact of the new tariffs and recent reductions in consumption taxes before making further adjustments.
Sitharaman urged policymakers and stakeholders to maintain “quiet confidence” rather than complacency, stressing the importance of sound decision-making in navigating complex economic conditions.
— news from Reuters
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India finance minister says growth remains resilient, but no room for complacency
NEW DELHI, Oct 3 (Reuters) – India ‘s Finance Minister Nirmala Sitharaman said on Friday that the government is committed to increasing state capital spending to support economic growth, stressing that the economy has remained resilient despite global headwinds. n n”With the steady share of consumption and investment in the overall GDP over the years, India ‘s growth is firmly anchored in its domestic factors, which minimises the impact of external shocks on overall growth,” Sitharaman said while speaking at the Economic Conclave, organised by the finance ministry. n nSign up here. n nHowever, the minister cautioned against complacency, urging “quiet confidence” in making and executing the right decisions. n nThe United States doubled tariffs on Indian goods to as much as 50% from August 27 over New Delhi ‘s continued imports of Russian oil. The levy is among the highest on U.S. trading partners alongside Brazil, and economists say the move could hurt exports including textiles, leather goods and chemicals. n nAs part of the federal budget, India announced plans to spend a record 11.21 trillion rupees ($126.3 billion) on infrastructure for the fiscal year ending March 2026, slightly higher than the previous year. n nThe Indian economy expanded 7.8% year-on-year during the April-June quarter, the fastest in five quarters, from 7.4% in the previous three-month period. It is projected to grow at 6.8% for the fiscal year amid increasing concerns about the impact of U.S. tariffs. n nThe Reserve Bank of India kept its policy rate unchanged at 5.5% on Wednesday, while signalling room to lower rates in December as it assesses the impact of the tariffs and recent consumption tax cuts on the economy. n n($1 = 88.7610 Indian rupees) n nReporting by Nikunj Ohri,Witing by Manoj Kumar; Editing by Sonia Cheema