The Union Finance Minister Nirmala Sitharaman is presenting her record eighth Union Budget – 2025 in Parliament amid high hopes of tax relief. Delivering the first full budget of Third Narendra Modi-government , Nirmala Sitharaman has become the only finance minister to present the Union Budget for eight consecutive times.
In her address on the Union Budget, India’s Finance Minister emphasized the importance of sustained economic growth amid a complex global environment. While she did not explicitly mention specific geopolitical issues, her remarks alluded to the broader challenges facing the world economy, which could have implications for India’s growth trajectory.
The Russia-Ukraine war, now in its third year, has disrupted global supply chains, driven energy price volatility, and heightened inflationary pressures worldwide. These disruptions have created a challenging environment for economies reliant on imports of energy and essential commodities. While India has demonstrated resilience in navigating these challenges, the prolonged conflict remains a significant risk to global stability and growth.
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Adding to the uncertainty is Donald Trump’s return to the US presidency. His previous tenure was marked by a protectionist trade policy, including tariffs on Chinese goods and strained relations with traditional allies. Trump 2.0 may reignite trade wars, further fragmenting global markets and undermining economic cooperation,given his America First Policy highlighted throughout his campaign and the Executive Orders issued just seconds after assuming Office.
For India, which has been positioning itself as a key player in global supply chains, such a scenario could present both challenges and opportunities. While India could benefit from companies diversifying away from China, heightened trade tensions could also dampen global demand and investment flows.
The Finance Minister’s address coincided with the release of a report projecting India’s economy to grow at 6.3%-6.8% in FY 2025-26. While this growth rate remains robust compared to many other economies, it reflects a slight slowdown from previous years. The report attributes this deceleration to global headwinds, including geopolitical tensions and trade uncertainties. However, it also notes that rural recovery and softer inflation could provide some support to domestic growth.
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To sustain and accelerate economic progress, the report underscores the need for more reforms, particularly at the state level. It calls for systematic de-regulation to improve the ease of doing business, attract investment, and foster innovation. The Finance Minister echoed this sentiment, urging Indian states to prioritize structural reforms to unlock their economic potential. She emphasized that a coordinated effort between the central and state governments is crucial to navigating the current challenges and ensuring long-term growth.
Despite the global slowdown, India remains a bright spot in the world economy. The Finance Minister expressed confidence in the country’s ability to weather external shocks, thanks to its strong domestic demand, prudent fiscal management, and ongoing reforms. However, she cautioned that vigilance and adaptability are essential in the face of evolving global dynamics.
As India continues its journey toward becoming a 5 trillion Dollar economy and a Viksit Bharat by 2047, it must balance domestic priorities with the realities of an uncertain world. The path ahead may be fraught with risks, but with the right policies and reforms, India can emerge stronger and more resilient.
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