FM Nirmala Sitharaman for boosting domestic demand to attract global investments amid Donald Trump’s tariff policy

Finance Minister Nirmala Sitharaman has highlighted the need to boost domestic demand after the Donald Trump administration announced reciprocal tariffs on April 2. According to FM Sitharaman, pushing domestic demand will help to attract global businesses.

“The US is the leading trade partner for India. So, at a time when trade is going to be influenced by tariffs, measures which the US government is taking, we still will have to make sure that the strength that India has in domestic demand as a big magnet which can attract global supplies must be sustained and boosted,” PTI quoted FM Sitharaman during an interaction at the High Commission of India in London.

FM Nirmala Sitharaman is on a six-day official tour of Europe from April 8 to April 13.

India and emerging markets to be engines of growth, says Sitharman

She also claimed that domestic demand will bring in foreign direct investment (FDI) and international manufacturing to the country.

“We think India, and a few emerging markets, are going to be the engines of growth. The global depressed growth, if it has to pick up, will have to be because of these engines,” she said.

Reciprocal tariffs on India

The Finance Minister's statement comes nearly a week after US President Donald Trump announced his reciprocal tariff policy. He proposed a minimum 10 per cent duty on nearly all goods entering the United States and a comprehensive tariff policy for most countries to correct the ‘trade imbalance.’ In the case of India, a reciprocal tariff of 26 per cent will be imposed.

Role of global interconnectedness

FM Nirmala Sitharaman noted that, with global interconnectedness, the Indian economy will be influenced by global risks and challenges due to geopolitical tensions, trade disruptions, and financial market volatility.

"In this phase of a rapidly evolving global policy landscape, with a number of imponderables, the government’s conviction is that the most effective path to building economic resilience is to foster domestic efficiencies and competitiveness,” she stated.

State of Indian economy

The Finance Minister claimed the Indian economy was well placed to utilise domestic efficiencies and tackle global headwinds.

“The world has seen depressed growth for over several years, earlier it was low interest for long and now it’s going to be low growth for long, and that’s not happy news for anybody. India has maintained its fastest growing economy tag continuously now for five years and we still think that momentum may moderate a bit, but it will still be India who will keep that growth… as our growth gets calibrated because of the consumption which exists domestically," she said.

"It is backed by demand for global-standard goods and that is why globalisation since the 1990s has given India many opportunities,” FM Sitharman added.

The Reserve Bank of India, in its first policy meeting of the financial year 2025-26 (FY26), on Wednesday, April 9, slashed the real economic growth outlook amid rising global concerns following the implementation of tariffs by US President Donald Trump.

(With inputs from PTI)