Finance Minister Nirmala Sitharaman highlighted India's economic resilience despite global turbulence, attributing the country's sustained growth to proactive fiscal and monetary policies, structural reforms and large-scale infrastructure development.
Speaking at the Foundation Day celebrations of Bank of Maharashtra in Pune, Sitharaman said India's strong macroeconomic fundamentals, a young workforce and reliance on domestic demand continue to be the nation's greatest strengths in navigating international uncertainties.
"India rebounded strongly and recorded an average annual growth of about 8% between 2021-22 and 2024-25. This resilience is not accidental. It reflects proactive reforms, improved governance, and digital as well as physical infrastructure creation," she said. The Finance Minister noted that GDP grew 7.8% in the April-June 2025 quarter, reaffirming India's position as the fastest-growing major economy.
Global Headwinds and Challenges
Despite strong growth, Sitharaman acknowledged mounting challenges from a volatile global environment, including geopolitical tensions, supply chain disruptions and protectionist measures. Recently, US President Donald Trump imposed 50% tariffs on Indian goods, hitting labour-intensive sectors such as textiles, gems and jewellery and footwear. Stricter US immigration policies have also impacted India's IT and service sectors.
Experts caution that global volatility could affect India's growth outlook, but strong domestic demand, low inflation and healthy foreign exchange reserves provide a cushion.
Sovereign Rating Upgrades
Amid this backdrop, international rating agencies have upgraded India's sovereign ratings, reflecting confidence in the country's fundamentals. S&P Global Ratings recently raised India's long-term sovereign rating from BBB- to BBB, the first upgrade in 18 years. Similar upgrades were made by Morningstar DBRS in May and Japan's R&I, underscoring investor confidence.
India's economy is projected to grow 6.3-6.8% in FY25, with reforms in indirect taxation and fiscal prudence expected to drive momentum, according to Chief Economic Adviser V. Anantha Nageswaran.
Banking Sector Reforms
Sitharaman also praised the turnaround of the banking system since the twin balance sheet crisis of 2013-14, crediting the Insolvency and Bankruptcy Code (IBC), RBI oversight, and professional bank management for strengthening the sector. She emphasized that banks must play a dual role - as custodians of savings and as growth engines, providing credit for MSMEs and capital expenditure projects.
"Grievance redressal must be backed by systemic corrections so that complaints do not repeat. As India leverages its youth dividend, it is crucial for banks to retain the trust of the younger generation," she added.
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