India is now firmly on the path of new 'atmanirbharta' growth code powered by self-reliance and self-respect, as the government is willing to walk the talk on accelerated reforms, protecting the export community, and cast the net of economic expansion wider into newer geographies and areas.
Speaking to Network18 Group Editor-in-Chief Rahul Joshi, Sitharaman said India would continue buying Russian oil if it served the economy’s interests and also dismissed US President Donald Trump aide Peter Navarro’s remarks about “Brahmins profiteering” due to crude purchases from Moscow as a “divide and rule” tactic.
Amid rising risks of India’s export competitiveness. However, this external pressure, while challenging, simultaneously presents a crucial opening for strategic and plucky policy reforms.
India’s exporters, smarting under the blunt Trump tariffs of 50 per cent, can look forward to some policy cushion soon, with Sitharaman making it clear that India cannot leave its "exporters high and dry". The package, awaiting Cabinet approval, will support industries hit hardest by the duties, as suddenly finding new markets is challenging.
Trump has deployed high tariffs as a no-holds-barred tool to make Russia fall in line and stop the war. India is an example, which faces 50 per cent tariffs for its goods entering India, purportedly because India buys oil from Russia. After the summit at Alaska, the question is: what now? The signal coming out from Anchorage is that tariffs will not yield much. The imposition of tariffs by the US has, undoubtedly, created a stir amid rising risks of India’s export competitiveness. But, it doesn’t look like helping in ending the war anytime soon.
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 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 the US has imposed punitive tariffs on India for purchase of Russian oil.
This period of disruption can be leveraged to foster greater self-reliance, strengthen domestic industries, and enhance the overall resilience of its economic framework. This could well be the occasion to cut bureaucratic hurdles and red tape to enhance India's attractiveness to both domestic and foreign investors and entrepreneurs.
The signals coming from the government demonstrates the urgency to significantly improve the ease of doing business and foster a more dynamic economic environment.
Hundreds of consumer items—from soaps to cars to air conditioners—could turn cheaper following the GST Council’s decision on September 3 to rejig rates under two broad slabs—5 per cent and 18 per cent—raising prospects of propelling the broader economy into a consumption-led growth lane.
Importantly, the GST rate rejig’s sweep is not limited to consumption goods alone. Prices of many intermediates such as cement are set to fall as the tax rate has been cut to 18 per cent from 28 per cent.
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.
Domestic household spending has been one of the strongest edifices of the India growth story. The lower GST rates on consumer goods and the resultant lower prices could potentially set off a virtuous cycle of greater demand and cooling inflation, presenting a crucial opening to offset the hammering from the US tariffs by an expansionary domestic market.
The finance minister 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.
India’s ties with China, which India overtook as the world’s most populous nation, is now under intense global scrutiny. The bonhomie among Prime Minister Modi, Russian President Vladimir Putin and Chinese President Xi Jinping during the recently concluded Shanghai Cooperation Organisation (SCO) summit in China, has drawn President Trump’s attention.
On September 5, the US President posted on social media: “Looks like we’ve India and Russia to the deepest, darkest, China. May they have a long and prosperous future together.”
The finance minister called for a greater need for "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."
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