Finance Minister Nirmala Sitharaman said on Thursday that despite global trade recalibration efforts being worrisome and difficult, she is confident that India will navigate these with policy stability and long-term vision.
“The intensification of tariff wars and the rise of protectionist policies have the potential to disrupt global supply chains, increase production cost and create uncertainty in investment decisions across borders. This has had the ripple effect on the financial markets across the globe including our own,” she said in her speech at an event of BSE completing 150 years.
She added that India’s financial markets have shown remarkable resilience despite recent global uncertainties, a testament of which is the fact that in the second half of March foreign portfolio investors (FPIs) made substantial investments in India’s financial sector, channelling over Rs 17,500 crore. At the same time, domestic institutional investors (DIIs) have played an increasingly playing a central role.
With the DII inflows far outpacing the net outflows of FPIs in the last financial year, she said this transition of DIIs from a supportive to a dominant role underlines the growing maturity and depth of India’s capital market.
According to her, India stands at a defining point in its economic journey from world’s 10th largest economy in 2014 to fifth largest, and sooner we will be the third largest with all our efforts.
“The efforts are much more required towards maintaining and moving upwards which can become very challenging. Sustaining ourselves on the third position will require a lot more planning,” she said.
She also appreciated how the retail investors for placing their faith in the markets, and the role played by women and youth in particular, but cautioned that any small omission or commission could shatter this newfound faith in the markets.