NEW DELHI: India is in a position to absorb shocks arising due to the current global trade uncertainties, geopolitical challenges and tariff situations, said Finance Minister Nirmala Sitharaman during her address at the Kautilya Economic Conclave 2025 in New Delhi.
"Sanctions, tariffs, and decoupling strategies are reshaping global supply chains. Wars and strategic rivalries are redrawing the boundaries of cooperation and conflict. Alliances that once appeared solid are being tested, and new coalitions are emerging. For India, these dynamics highlight both vulnerability and resilience. Our capacity to absorb shocks is strong, while our economic leverage is evolving, " said Sitharaman at the event.
She acknowledged the fact that for many smaller developing nations, the current geopolitical environment poses fundamental challenges. However, there could be several risks and opportunities that the developing economies can look into. Finance Minister Nirmala Sitharaman highlights resilience of Indian economy, calls for inclusive global cooperation.
Admitting that downside risks from tariff escalations in developed markets and slowing demand in key export destinations, she noted that India’s reliance on domestic demand, infrastructure investment and policy flexibility has been a buffer.
At the same time, Sitharaman called for reforms in multilateral institutions to better reflect the stakes of emerging economies—urging richer nations to provide climate finance, concessional lending and market access to developing countries. Her remarks echo India’s long-standing push for greater voice for the Global South.
She added, "If multipolarity is our future, what shape will it take? Will it be one of cooperative pluralism, where different models coexist, or will it harden into rival blocs and spheres of influence, forcing nations to pick sides? History offers no guarantees, but the possibility of a fragmented world, with multiple centres of power, and competing values appears more likely."
She cautioned that trade imbalances have hollowed out industries in some nations while creating overcapacity in others. Financial imbalances have concentrated wealth in speculative sectors while depriving the real economy of investment.