India's Domestic Demand Big Magnet Amid US Trade Tariffs: Nirmala Sitharaman

Finance Minister Nirmala Sitharaman said on Tuesday that the resilience of the economy and strength of domestic demand will continue to make India an engine of growth amid the rapidly evolving global trade landscape as a result of US tariffs.

In an interaction entitled the ‘Opportunities and challenges for India's quest to become a developed economy by 2047' at the High Commission of India in London, she asserted that the economy was well placed to capitalise on domestic efficiencies and competitiveness as it tackles global headwinds.

“The world has seen depressed growth for over several years; earlier, it was low interest for long and now it's going to be low growth for long, and that's not happy news for anybody,” said Ms Sitharaman, who is in London on her first UK visit in her current Union Cabinet term.

“India has maintained its fastest growing economy tag continuously now for five years and we still think that momentum may moderate a bit, but it will still be India who will keep that growth… as our growth gets calibrated because of the consumption which exists domestically. It is backed by demand for global-standard goods and that is why globalisation since the 1990s has given India many opportunities,” she said.

“The US is the leading trade partner for India. So, at a time when trade is going to be influenced by tariffs, measures which the US government is taking, we still will have to make sure that the strength that India has in domestic demand as a big magnet which can attract global supplies must be sustained and boosted,” she noted.

The minister said the strength of this demand would prove attractive for foreign direct investment (FDI) and international manufacturing to supply for the domestic market and also export from India.

“We think India, and a few emerging markets, are going to be the engines of growth. The global depressed growth, if it has to pick up, will have to be because of these engines,” she said. 

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