Amid rising global trade barriers and shifting investment flows, Finance Minister Nirmala Sitharaman sees a silver lining—strategic opportunities for deeper India–US ties in high-stakes sectors like semiconductors, quantum tech, pharmaceuticals, and nuclear energy.
Speaking at the Hoover Institution, Stanford University, Sitharaman noted that trade restrictions have increased much since 2019, as countries look inward to safeguard domestic industries and jobs.
“Unsurprisingly, global trade investment markets are being reimagined to bring about a better balance between externally led growth and domestic growth, between the Main Street and the Wall Street, and between transition and energy security,” she said.
Despite appearing daunting, these global shifts “are full of new opportunities,” she added.
Also read: India, US progressing on bilateral trade agreement; first tranche expected by autumn: Sitharaman
Sitharaman is on an official visit to the US from 20-25 April to attend the Spring Meetings of the International Monetary Fund (IMF) and World Bank and meet her US counterpart Scott Bessent.
On the domestic front, she said India’s long-term growth would require bold reforms, deregulation, enhanced institutional partnerships, and agile policy strategies attuned to a changing global landscape.
The last two Union Budgets, she noted, have already laid the groundwork with a clear, multi-sectoral agenda.
Manufacturing as core
Sitharaman placed manufacturing at the heart of India’s transformation story—both as an economic engine and a pillar of national strength.
“Manufacturing binds societies and leads and lends cohesion to communities by providing employment opportunities and financial strength to communities,” she said.
“In the post post-Covid world, manufacturing enhances national security,” she added.
Sitharaman also emphasised that the government is focused on cutting regulatory friction, digitizing approvals, and integrating MSMEs into global value chains while adding that targeted support—especially for women-led and rural enterprises—will be key to expanding economic opportunities and driving inclusive growth.
Pointing to India’s demographic advantage, Sitharaman stressed the importance of aligning education with the needs of Industry 4.0.
“India has an unprecedented opportunity to reap a demographic dividend, but this requires matching education and skilling with the demands of Industry 4.0,” she added.
Meanwhile, Sitharaman underscored prudent fiscal management and sweeping structural reforms as twin pillars of India’s long-term growth, reaffirming the government’s commitment to fiscal consolidation.
“Prudent fiscal management will be one of the most important pillars of India’s drive,” she said, adding that the government aims to strike a balance between savings and investment, ensure a strong external account, and enable private enterprises to access capital at a reasonable cost.
“In 2020–21, we promised to more than halve the fiscal deficit. We have delivered on that promise, as the government’s deficit ratio has declined from 9.2% of GDP to a budgeted 4.4% this financial year,” she added.
Sitharaman said the quality of fiscal consolidation is reflected in a steady increase in capital expenditure.
“Capital expenditure as a percentage of GDP has risen from 2.1% in 2020–21 to a projected 3.1% in 2025–26,” she said.
A medium-term fiscal consolidation path has also been laid out, she added.
Sitharaman said the government remains committed to easing the cost of doing business, particularly for MSMEs.
“Flexible labour laws, transparent land markets, and simplified tax regimes must converge to create a seamless, competitive environment,” she added.
