India bets on policy agility to beat global supply chain woes: Sitharaman
New Delhi, Apr 17, 2025
The finance minister praised the resilience of India's financial markets amid global uncertainties and commended the growing confidence of retail investors
Union Finance Minister Nirmala Sitharaman on Thursday took a veiled dig at US President Donald Trump’s new tariff rules but reiterated that India is fully prepared to navigate the ongoing “global disruptions” with responsive policies and strong investments.
Speaking at an event organised by the Bombay Stock Exchange (BSE) in Mumbai to mark its 150th anniversary, Sitharaman noted that “Rise of protectionist policies have the potential to disrupt global supply chains, increase production costs.”
However, she added that India would "...navigate global disruptions with policy agility and long-term investments.”
On April 2, President Trump announced sweeping reciprocal tariffs on almost all countries, including India. Under the new policy, most Indian imports into the US will be taxed at 26 per cent. However, the US administration offered a 90-day grace period before the new tariffs come into effect, giving countries (except China) that were willing to negotiate an opportunity for getting their tariff rates revised.
Trump defended the move, saying it would encourage companies to shift manufacturing to the US, thereby creating thousands of jobs for Americans. However, many economists and market experts have warned that these tariffs could lead to higher inflation in the US and possibly trigger a global recession.
'Recalibration efforts very challenging'
Acknowledging the complex global environment, Sitharaman admitted that recalibrating trade strategies under such conditions is extremely tough.
“The recalibration efforts on trade are very, very challenging,” she said.
Despite these headwinds, Sitharaman praised the resilience of India's financial markets. She pointed out that Indian markets have stayed strong despite recent global uncertainties, and credited retail investors for their growing faith and participation.
“India's financial markets have shown remarkable resilience despite recent global uncertainties,” Sitharaman said.
She also highlighted the growing strength of domestic institutional investors (DIIs), who have moved beyond merely supporting the markets to taking a leadership role, reflecting the increasing maturity and depth of India’s capital markets.
Global stock markets, including India’s, have seen sharp volatility after Trump’s announcement of widespread tariffs. However, markets regained some stability after the US government announced the 90-day delay in implementation, offering a temporary breather to global trade dynamics. The US' Nasdaq, in particular, has taken a hit given American companies' reliance on China, as well as that country's restriction on exports of rare earths, which are a key resource in high-end computing, particularly in defence, energy, and auto industries.
(With PTI inputs)
[The Business Standard]
