Trade fragmentation could have impact on banking, fin sector, says SBI Setty
This story was originally published at 17:33 IST on 6 November 2025
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--SBI Setty: Volatility affecting invest flows, capital formation
--CONTEXT: SBI Chairman Setty speaks at SBI's banking & econ conclave
--SBI Setty: Trade fragmentation to impact banking, finance
--Sitharaman: Efforts on in full force to sign trade deal with US, EU
--Sitharaman on US trade deal: Efforts being made, waiting for final results
--Sitharaman: Capital movements becoming speculative
--Sitharaman: India too needs independence from global energy reserves
NEW DELHI – The contemporary situation of trade fragmentation could have natural consequences for the banking and finance sector, which operates on predictability, rules, and trust, State Bank of India Chairman C.S. Setty said Thursday. Setty was referring to the high tariffs levied by the US and restrictions by China on exports of critical minerals.
"Global economy is at a crossroads with tariff wars and trade tensions dominating the headlines," Setty said at SBI's Banking and Economic Conclave in Mumbai. Areas like trade, critical minerals, and technology, which were once seen as areas of cooperation, are now being weaponised to serve national interests, he said.
While India has coped well with the uncertainties, volatility is the order of the day, the SBI chairman said. "It is adversely affecting investment decisions, capital flows, and financial returns," he said.
In the backdrop of trade fragmentation and eroding global cooperation, the idea of self-reliance, or Aatmanirbhar Bharat, has gained more prominence than before, Setty said. Finance Minister Nirmala Sitharaman, who was also present at the event, stressed that self-reliance in five important areas--economy, social sector, technology, defence strategy, and environment and energy--is the key to meeting the goal of Viksit Bharat by 2047. The government has set a target of making India a developed country by 2047.
The world is facing slower globalisation, fragile supply chains, and rising climate transition costs, which are also making capital movement speculative, Sitharaman said. In the midst of all this, India must strive to achieve independence from fragile global energy and resource systems by nurturing sustainability at home, the minister added.
Meanwhile, India is also trying to sign free trade agreements with developed economies to integrate itself better with supply chains. New Delhi is also in discussions with the US for a trade deal, which may also lead to relaxation of the 50% tariff imposed on Indian goods in the US.
The commerce ministry is working to conclude the deal with the US, Sitharaman said, adding that everyone is waiting for the results. "Efforts are in full force to conclude trade deals with the US and the European Union," she said. New Delhi and Brussels have set a target of closing their deal by December. End
Reported by Krity Ambey
Edited by Rajeev Pai
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