FM Nirmala Sitharaman on US tariff impact, Russian oil purchase, GST reforms and more: Highlights

Sitharaman said the Centre is preparing a relief package to help exporters cope with the steep 50% tariffs imposed by US President Donald Trump, saying that India cannot leave its "exporters high and dry".

She added that the package, awaiting Cabinet approval, will support industries hit hardest by the duties, as suddenly finding new markets is challenging.

FM Nirmala Sitharaman's exclusive interview to Network18: Full coverage

Russian oil & Trump tariffs

Sitharaman made it clear that India will continue purchasing Russian oil, stressing that decisions will be guided solely by national interest.

“Whether it is Russian oil or anything else, we will take a call based on what suits our needs in terms of rates, logistics or whatever. Where we buy our oil from, especially it being a big ticket foreign exchange related item, is a call we will take based on what suits us best. So, we will undoubtedly be buying Russian oil," she said, even as US has imposed punitive tariffs on India for purchase of Russian oil.

Sitharaman added that reforms like GST will offset the impact of concerns due to US tariffs.

GST reforms

Sitharaman revealed that Prime Minister Narendra Modi had reached out to her eight months ago to explore a revamp of the GST framework, well before his Independence Day announcement.

She said that PM Modi stressed on simplifying the system to ease the burden on the middle class. She said the new GST reforms, announced earlier this week, aim to reduce litigation, bring predictability for businesses and states, and reaffirm the government’s commitment to small businesses, the middle class and farmers.

Sitharaman added that 99% of all goods and services under GST are now either in zero, 5%, or 18% and only 1% is being taxed as demerit or sin goods.

She also clarified that petroleum products and alcohol will continue to remain outside the purview of GST.

'Rupee not weakening'

Sitharaman said that the rupee is not weakening despite concerns amid the currency hitting a lifetime low on Friday.

"Rupee is volatile only against the dollar, and many countries are experiencing this. Rupee is not weakening - I have been trolled for saying this," she said. On September 5, rupee fell 0.14% to 88.2650 against the US dollar, from 88.1450 in the previous session.

China ties

The finance minister called for a greater need on "true engagement" amid positive momentum in India's ties with China.

“Unless there is a true engagement and not a procrastinating engagement a conclusion with the Chinese takes time,” Sitharaman said. She added that India has relaxed some norms for investments from China and projects have opened for them.

She also said there is a need to have more trade talks with China. “We need to have trade conversations, market access conversations and unless we do that, we can talk about a lot of these issues."

Ban on online games

Speaking about the recent law prohibiting real money online betting, Sitharaman said the government introduced the legislation to protect families, especially children, from the ill effects of these activities.

“We have not banned games for recreational purposes, it is only when you start betting with money. It is question of number of people who said that families were shaken up and children could not be controlled from temptation,” she said, in response to a question over the Promotion and Regulation of Online Gaming Act, 2025, recently passed by the Parliament.

On Navarro's controversial remarks

The finance minister also hit out at the Opposition for defending US trade adviser Peter Navarro’s controversial “Brahmins profiteering” remark, calling it a “divide and rule” tactic and an affront to India’s self-respect.

She said it was shocking that colonial-era terms were being justified, adding, “Atmanirbhar also includes self respect.” Sitharaman stressed that 75 years after Independence, India should assert its dignity rather than accept explanations for derogatory references.

The controversy began after Navarro accused “Brahmins” of profiteering from India's purchase of Russian oil. TMC leaders Saket Gokhale and Sagarika Ghose said that he meant to say “Boston Brahmins” — a term historically used for America’s wealthy elite, not India’s caste system.

Opposition's GST remarks

The finance minister also hit back at the Opposition’s criticism of the recently announced GST reforms, saying Congress neither brought GST nor understood how it works.

She dismissed Rahul Gandhi’s “Gabbar Singh Tax” remark and Congress leader P Chidambaram’s claim that reforms had come too late, adding that the Congress had failed to earn people’s trust during its tenure. “Despite the overwhelming support from people for the GST reforms, it is irresponsible for the Opposition to say something… They could neither bring it (GST), nor have they understood how it works,” she said.

Sitharaman underlined that the GST Council was the only constitutional body post-independence that had united the country on taxation, with reforms accelerating in sectors like finance, IT, and sustainability.

Meeting fiscal deficit targets

The finance minister also said that the central government will meet its fiscal deficit target of 4.4 percent of the GDP for FY26, while capital expenditure will be conducted as per the estimates in the Budget.

“At this point, I can say with confidence that capex of government will not come down, it will be completed as per the Budget estimated timeline. And so will the fiscal deficit, this is the last point of my gliding path, I will adhere to it,” she said.

IDBI stake sale

Sitharaman said that the strategic divestment of IDBI Bank is progressing swiftly and should conclude by FY26, adding that more stake sales could follow.

DIPAM Secretary Arunish Chawla earlier confirmed that qualified bidders have completed due diligence, with the process now at an advanced stage and expected to wrap up within the fiscal.

FDI, FPI norms

During the interview, the finance minister also hinted at upcoming reforms in FDI and FPI norms.

“I don't want to give any headline but certainly we are looking at every aspect of reform," she said. Currently, FPIs and their investor groups can hold up to 10% in a listed company, with anything above that classified as FDI.

In November, the RBI introduced a framework allowing reclassification of FPI as FDI if holdings cross the threshold, subject to RBI and SEBI conditions. While FDI involves direct investment in business operations or assets, FPI covers investments in financial securities such as stocks and bonds.