NEW DELHI – Finance Minister Nirmala Sitharaman on Friday reaffirmed the government’s commitment to boosting public capital expenditure to drive growth, noting that India’s economy continues to withstand global challenges.
Speaking at the Economic Conclave hosted by the finance ministry, she said, “With the steady share of consumption and investment in overall GDP through the years, India’s growth is firmly anchored in domestic drivers, reducing the impact of external shocks.”
Sitharaman, however, warned against overconfidence, urging the adoption of “quiet confidence” while making and implementing policy choices.
The comments come as the United States has doubled tariffs on Indian goods — effective August 27 — raising duties on items such as textiles, leather products, and chemicals to as high as 50%, among the steepest imposed on any U.S. trading partner except Brazil. Analysts warn this could weigh on Indian exports.
In its latest budget, New Delhi allocated a record 11.21 trillion rupees ($126.3 billion) for infrastructure spending for the fiscal year ending March 2026, a slight increase from the previous year.
India’s economy grew 7.8% year-on-year in the April–June quarter, its fastest pace in five quarters, up from 7.4% in the prior quarter. Growth for the fiscal year is forecast at 6.8%, though concerns persist over the tariff impact.
The Reserve Bank of India this week kept its benchmark rate steady at 5.5% but signaled it could cut rates in December as it evaluates the effects of tariffs and recent tax relief on consumption.
($1 = 88.7610 Indian rupees)