India’s growth firmly anchored on domestic factors, says FM

“We have implemented strategic reforms that enhance the ease of doing business, promote financial inclusion, and improve the quality of life for the average citizen in the country. With the steady share of consumption and investment in the overall GDP over the years, India’s growth is firmly anchored in its domestic factors, which minimises the impact of external shocks on overall growth. As a result, the Indian economy is resilient and continues to grow sustainably,” she said at the Kautilya Economic Conclave (KEC) 2025.

FM said the theme of the conclave –– Seeking Prosperity in Turbulent Times –– is apt. “In this era of unprecedented global uncertainty and volatility, this conclave provides an invaluable opportunity to bring together distinguished economists and policymakers. KEC is an annual flagship initiative of the Institute of Economic Growth (IEG) and the ministry of finance to foster dialogue across and between countries to promote better understanding on contemporary national and global challenges.

“We gather at a time when the very foundations of the global order are shifting beneath our feet. The world that emerged after the end of the Cold War, which led to the expansion of globalisation, open markets, and the pursuit of multilateral cooperation, now appears to be a relic of the past,” the minister said. For three decades, a contested equilibrium allowed nations to pursue prosperity through integration and interdependence. That equilibrium has inevitably been upended, and the rules of international engagement are being rewritten, she added. The three-day conclave will conclude on Sunday.

The finance minister said the world is not facing a temporary disruption but “a structural transformation” as “the international order is morphing. Trade flows are being reshaped, alliances are being tested, investments are being rerouted along geopolitical lines, and shared commitments are being re-examined.” She said it is not easy to describe the new equilibrium because of several variables. “The only thing that can be stated for sure is that omnipresent uncertainty is the new norm,” she said.

“The absolute dominance once enjoyed by a hegemon is now contested,” Sitharaman said, without naimg the world’s largest economy, the US. For decades, many Asian nations absorbed the material gains of globalisation without adopting the same political values that underpinned Western society. Today, they assert alternative models of growth and governance, drawing on their civilisational continuities. Their emergence questions the assumption that Western liberal values are the only path to economic success, she added.

For nations still climbing the development ladder, the trade-offs between energy transition and energy security, between the imperative of growth and the urgency of sustainability, are particularly acute, she said. Energy imbalances have made some societies chronically dependent on costly imports even as others subsidise their industries with cheap, carbon-intensive power. Net-zero commitments, pursued without regard to trade-offs, risk driving up costs for developing economies while constraining their growth, she said. These imbalances have become structural features of our world, distorting incentives and fuelling political discontent, she said.

“The task before us, therefore, is not simply to manage uncertainty but to confront imbalance. We must ask ourselves: how can we build a global order where trade is fair, finance serves productive ends, energy is both affordable and sustainable, and climate action aligns with development imperatives? How can international institutions be reformed to reflect today’s realities rather than yesterday’s hierarchies? And crucially, how can the voices of developing nations, no longer marginalised in rulemaking, be amplified in shaping the future?” Sitharaman said. The finance minister said developing countries cannot afford to be passive spectators in a world “where decisions elsewhere determine our destinies”.