The world is going through a phase of trade recalibration and those efforts are going to be challenging, Union Finance Minister Nirmala Sitharaman said on Thursday. She pointed out that the world was looking towards India, not just for the impressive growth trajectory or demographic strength, but for the example it can set as a nation that leads with integrity, inclusivity and innovation.
A message to all stakeholders in this vibrant ecosystem:
— Nirmala Sitharaman Office (@nsitharamanoffc) April 17, 2025
- To our Market Intermediaries and Exchanges, I appeal you to innovate with purpose, but always put the investor at the centre.
- To our Investors, I appeal you to stay informed, stay patient, and believe in the long-term… pic.twitter.com/LhJsKBK30Q
"The intensification of tariff wars and the rise of protectionist policies have the potential to disrupt global supply chains, increase production costs and create uncertainty in investment decisions across borders as well. This has had a ripple effect on the financial markets across the globe and including our own market," she said.
Sitharaman was addressing a gathering of capital market participants at an event marking 150 years of the Bombay Stock Exchange.
"Because of the calibrated approach that we took, India is confident that we will navigate these global disruptions with policy agility and long-term vision," she stressed.
Nirmala Sitharaman's views come amid rising global economic uncertainty after US President Donald Trump announced reciprocal tariffs on many countries including India. Since then, the tariffs have been paused for 90 days for all nations, excluding China, essentially giving time for countries to negotiate.
Amid the uncertainty, one thing that stood firm was the strength of the Indian economic fundamentals and the macroeconomic prudence with which the economy was being managed, she said.
"Our focus remains firmly on building robust domestic foundation and the foundation is laid and strengthened through infrastructure development, inclusive growth and deeper regional cooperation," said Sitharaman.
The role of capital markets in India's growth has never been more important than it is now, she stated, applauding the significant growth Indian markets have seen over the past few decades.
"From its (Sensex) start at around 550 points, that is in 1986 (Sensex was first introduced that year), to touching a high of 80,000 points in July 2024, it has mirrored the resilience and the growth potential of the Indian economy itself. So, I think this is a barometer to show where the Indian economy is strengthening, where it is moving towards, and therefore, even as we celebrate 150 years, we are celebrating how you mirror the growth potential of the Indian economy," noted Sitharaman.
Retail participation in India's equity markets has surged over the last few years, through direct participation in the stock market as well as via mutual funds. For instance, SItharaman noted India now had 19.2 crore demat accounts.
In a rapidly growing market, with increasing retail participation, investor education becomes "very, very vital", urged Sitharaman. Investor awareness programs in regional languages should be conducted across urban and rural areas, particularly focusing on students, senior citizens, women, rural investors and first-time traders, she added.
She further said that stock exchanges served not just as trading platforms, but as first-line regulators and that they need to balance the cost of compliance with such regulations and enable innovations and informed risk-taking.
