“Just as eternal vigilance is the price of liberty, eternal performance is the price of strategic independence,” she remarked, underscoring the need for sustained policy effort.
FM Nirmala Sitharaman ( File Photo: ANI)
Union Finance Minister Nirmala Sitharaman said the era of globalisation and open markets that defined the post-Cold War world has become ”a relic of the past”, cautioning that nations now face a structural transformation of the global order amid heightened uncertainty.
Speaking at the fourth Kautilya Economic Conclave, Sitharaman described India as a “stabilising force” in the turbulent global landscape, with growth anchored in domestic drivers like consumption, investment, reforms, and inflation management that shield the economy from external shocks.
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“Just as eternal vigilance is the price of liberty, eternal performance is the price of strategic independence,” she remarked, underscoring the need for sustained policy effort.
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he Finance Minister’s comments come against the backdrop of mounting headwinds. India’s economy grew 7.8 per cent in Q1 FY26, a five-quarter high that defied expectations of a slowdown.
For FY25, GDP is estimated to have expanded 6.5 per cent, down from 9.2 per cent in FY24. However, steep US tariffs, geopolitical flashpoints in West Asia and Ukraine, and rising energy costs threaten to weigh on the outlook.
The United States has imposed successive tariff hikes this year, including a 25 per cent duty on nearly all Indian exports effective August 6, followed by an additional 25 per cent levy later that month in response to New Delhi’s discounted purchases of Russian oil. In September, the US announced a 100 per cent tariff on imported patented pharmaceuticals unless firms establish production in the US, a move expected to hit India’s pharma sector in the coming months.
Sitharaman said global trade flows, capital markets, and alliances are being increasingly redrawn along geopolitical lines. “What we face is not a temporary disruption but a structural transformation,” she said. “The question is what lies on the other side of this transformation and on what terms.”
She outlined stark trade-offs for developing economies: balancing growth with sustainability, energy transition with energy security, and investment needs with high borrowing costs. “These choices are not abstract; they affect the daily lives of citizens,” she stressed.
Highlighting India’s economic resilience, Sitharaman credited a decade of fiscal discipline, quality capital expenditure, inflation control, and reforms aimed at improving ease of doing business and financial inclusion. “This foundation has enabled the economy to grow with quiet confidence despite global turbulence,” she said.
Yet, she warned that the global environment is increasingly fragmented, with technologies such as stablecoins disrupting monetary systems and strategic rivalries testing alliances. She called for reforms of international institutions to reflect present realities and give a greater voice to developing nations.
Calling the current period an “inflection point,” Sitharaman urged policymakers to actively shape the emerging global order. “While history may sweep in wide arcs, the choices we make today will decide whether its currents carry us or whether we steer its course,” she said.
On the domestic front, she reaffirmed the government’s commitment to fiscal consolidation, inflation control, and higher-quality capital expenditure.
“With the steady share of consumption and investment in overall GDP over the years, India’s growth is firmly anchored in its domestic factors, minimising the impact of external shocks,” she said.
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