India weathers global economic turbulence.
Finance Minister Nirmala Sitharaman Says India Weathered Global Turbulence With Strong Fundamentals
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Key Points
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Sitharaman said India’s foreign-exchange reserves stood at about $766 billion, adding another indicator of the country’s capacity to withstand external shocks.
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She noted that global public debt had risen to nearly 94% of GDP in 2025 and was projected to reach 100% by 2029—a level last seen in the aftermath of the Second World War.
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Sitharaman said more than 52 crore collateral-free loans had been sanctioned under PM MUDRA Yojana; she also cited non-food credit growth of 18.8% in the year to August 2026.
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She said emergency credit-line schemes helped businesses manage liquidity pressures during disruptions, while warning that continued access to working capital and financial markets remained important.
India has weathered global economic shocks with its fundamentals intact, Finance Minister Nirmala Sitharaman said at the 2026 Kautilya Economic Conclave. She pointed to 7.8% first-quarter GDP growth, inflation near 4.8% in August, and foreign-exchange reserves of $766 billion as proof of the country's resilience Hindu Business Line.
But Sitharaman warned that the global economy faces new dangers. Public debt worldwide has climbed to 94% of GDP in 2025 and is expected to hit 100% by 2029—levels unseen since World War II Dynamite News. Rising debt and shrinking policy buffers have made economies more fragile, she said.
Strong Growth and Stable Prices Drive Confidence
India's economy expanded at 7.8% in the first quarter while keeping inflation stable at 4.8%, beating expectations during a period of global turbulence Daijiworld. The current-account deficit sits at just 0.5% of GDP, showing India is not importing too much relative to its exports. Foreign-exchange reserves of $766 billion give the country a strong cushion against external shocks Hindu Business Line.
Credit and Loans Fuel Business Growth and Jobs
India has sanctioned more than 52 crore collateral-free loans under the PM MUDRA Yojana program, which helps small businesses and entrepreneurs get capital without pledging assets Dynamite News. Non-food credit growth reached 18.8% in the year to August 2026. Emergency credit schemes also helped businesses manage cash shortages during disruptions Hans India.
Infrastructure and Reforms Build Long-Term Strength
Sitharaman credited fiscal discipline, banking reforms, and household-support programs for India's gains. The government expanded highways and railways, added airports, and boosted port capacity. Major reforms like the Goods and Services Tax (GST) and the Insolvency and Bankruptcy Code streamlined business Hindu Business Line. She stressed that timely project completion and steady access to working capital remain vital Daijiworld.
Global Debt Crisis Leaves Little Room for Error
While India has proven its strength, the rest of the world faces mounting risks. Global public debt hit 94% of GDP in 2025 and is projected to reach 100% by 2029 Dynamite News. This levels matches the aftermath of World War II. Sitharaman warned that thin policy buffers—the money governments have left to spend during crises—make the global economy fragile and vulnerable to shocks.
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