Resource security key as global economy faces uncertainty: Finance minister

Union Finance Minister Nirmala Sitharaman emphasized the importance of national security and structural autonomy in strategic inputs amid global economic uncertainty, as outlined at the Kautilya Economic Conclave. She argued that resource security should be at the center of macroeconomic policy, highlighting the need for private investment in research, innovation, and skilling to prepare for a changing world of work.

Sitharaman also stressed the necessity of building resilience, stating that it is an ongoing process rather than a one-time effort. The global economic uncertainties caused by US tariffs and conflicts in Ukraine and West Asia have disrupted supply chains, leading to higher commodity prices. She noted that while monetary and fiscal tools can mitigate price shocks, quantity shocks require buffer stocks and the capacity of the state to address delivery system issues.

Sitharaman argued that supply chains optimized solely for cost have hidden fragility, advocating for domestic operational depth in critical minerals, rare earths, semiconductors, and small modular nuclear reactors. To achieve resilience, she emphasized India's focus on entrepreneurial growth, efficient last-mile delivery, infrastructure creation, and managing prices, essential supplies, and external pressures.

She highlighted the resilience demonstrated by India, such as avoiding an inflation spiral, fuel outlet queues, banking stress, and fiscal corrections, which should be given equal importance to headline growth rates by economists. Sitharaman advocated for open, predictable, and rule-based global economic relationships, urging nations to engage through dialogue and negotiated agreements, rather than allowing geopolitical differences to hinder trade and investment.