Global trade war worrisome, difficult to navigate, says Sitharaman
This story was originally published at 19:59 IST on 18 April 2025
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MUMBAI – The ongoing trade war between major economies of the world is worrisome and difficult to navigate for India, too, Finance Minister Nirmala Sitharaman said while speaking at an event organised by the BSE on Thursday here. "We recognize that the global landscape is changing rapidly, and the world is going through a phase of ‘trade recalibration', Sitharaman said. "Given our global interconnectedness, the Indian economy is not isolated from these global risks and challenges," she said.
The intensification of tariff wars around the globe 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, Sitharaman said. These disruptions have had a ripple effect on the financial markets across the globe, including Indian markets, she said.
However, the strength of India's economic fundamentals and macro-economic prudence have stood firm during this turmoil, Sitharaman said. "We offer investors a combination of policy stability and growth, governance and innovation, macro-economic prudent policies, democratic institutions and youthful dynamism," she said.
Sitharaman also said that the Indian economy will be able to get through the turmoil due to long-term investment vision and the policy effeciency of the government. She urged investors "to stay informed, stay patient, and believe in the long-term promise of disciplined wealth creation." She also appreciated retail investors for retaining trust in Indian financial markets despite global turmoil.
Sitharaman said the Indian capital markets will play a crucial role in the journey to a developed country, being one of the important engines of national development. "Driven by a strong regulatory architecture and enabled by reforms such as de-materialization, T+1 settlement, direct market access, and mutual fund penetration, India has built one of the most robust market infrastructures in the world," she said. She also said that the T+1 settlement structure is India's pole star and remains a point of envy for many developed nations.
India's rising weightage in the MSCI index also shows the trust that global investors have in Indian equities, Sitharaman said. She also said that domestic institutional investors have played an increasingly central role in the development of the Indian markets. "This transition of DIIs from a supportive to a dominant force underlines the growing maturity and depth of India's capital markets," Sitharaman said.
The increased activity in the primary market reflected in the high number of inital public offerings shows a shift of corporates towards equity financing, Sitharaman said. "Over the past five years, the number of domestic IPOs surged threefold -- from 106 to 320 – culminating in record equity issuances of 4.2 lakh crore (INR 4.2 trillion) in FY25 (2024-25), twice the amount raised in the previous year," she said.
Sitharaman also said that the governemnt is working towards expanding investor education through SEBI and AMFI (Association of Mutual Funds in India), simplifying KYC (know your customer) norms and onboarding processes via aadhaar-linked verification, and strengthening grievance redressal mechanisms.
For the exchanges, Sitharaman said that these are more than just trading platforms. "As first-line regulators, the stock exchanges carry a profound responsibility. At the same time, they need to balance the cost of compliance with such regulations and enable innovations and informed risk-taking," she said.
The exchanges must innovate and design products that are accessible, understandable, and aligned with the risk appetite and savings behaviour of our citizens, she said. Indian corporates should let transparency, sound governance, and commitment to shareholder value be the guiding principles, Sitharaman said.
At last, Sitharaman urged Indian regulators to remain proactive, agile, and responsive in a world defined by rapid change. Sitharaman also launched BSE's new INDIA 150 Index, which includes top 150 most liquid stocks of Indian companies. End
Reported by Kabir Sharma
Edited by Deepshikha Bhardwaj
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