Finance Minister Nirmala Sitharaman affirmed that India’s economic growth is firmly anchored in domestic consumption, making it resilient against global volatility. Speaking at the Kautilya Economic Conclave 2025, she said India’s capacity to absorb external shocks—tariffs, conflicts, and supply chain realignments—reflects strategic independence built on sustained reforms. Sitharaman reiterated India’s ambition of 8% annual growth to achieve developed nation status by 2047.
Core Development
India’s growth resilience credited to strong domestic demand and strategic reforms.
FM called the resilience “neither accidental nor transient.”
Emphasised the need for fiscal consolidation, high-quality capital expenditure, and controlled inflation.
India’s GDP grew 7.8% in Q1 FY26, the fastest in five quarters.
RBI projects 6.8% growth for FY26, up from 6.5% last year.
Sitharaman also warned of rising global rivalries reshaping alliances and cooperation.
Key Drivers / Issues
Expanding middle-class consumption fueling domestic demand.
Continued public investment in infrastructure driving multiplier effects.
Strategic focus on ease of doing business and financial inclusion.
Tariff shocks and trade tensions pushing India toward self-reliance and reform-led growth.
Stakeholder Impact
For businesses, robust consumption ensures a stable domestic market even amid global uncertainty. Investors gain confidence from India’s reform-oriented fiscal discipline. Consumers benefit from steady job creation and improved purchasing power, while policymakers can maintain growth without heavy external dependence.
Industry & Policy Reactions
Economists say India’s reliance on domestic demand provides a natural buffer against global slowdowns. Policy experts highlighted the FM’s remarks on reforming global financial systems, including digital currency frameworks like stablecoins, as evidence of India’s forward-looking economic strategy.
Challenges Ahead
Sustaining domestic consumption amid global headwinds.
Balancing growth with fiscal prudence.
Adapting to technological and monetary transformations such as digital currencies.
Strategic Outlook
India’s economic model is transitioning from export-led to consumption-driven growth, with reforms ensuring structural stability. Continued policy agility will be vital to maintaining strategic independence and long-term resilience.
Why This Matters
India’s focus on robust consumption reflects a shift toward self-sustaining economic resilience. As global shocks intensify, this internal strength is key to achieving Viksit Bharat 2047.
