FM Sitharaman explains how India managed economic fallout from West Asia crisis
New Delhi, July 4
India successfully managed the economic fallout of the West Asia crisis that began on February 28 and continued to remain the fastest-growing major economy in the world with registering strong growth, amid signing free trade agreements and robust domestic consumption, Finance Minister Nirmala Sitharaman said in an interview with leading French newspaper Le Figaro.
She told Fabrice Node-Langlois, Editor-in-chief-Economics, that the free trade agreement signed last January by the European Union and India after protracted negotiations "will have a considerable impact on global trade itself" and that "the Indian middle class is a powerful driver of consumption."
On May 10, Prime Minister Narendra Modi urged citizens to avoid international travel, postpone gold purchases for a year, and reduce both car use and cooking oil consumption.
"I've taken to summarising the Prime Minister's advice with a simple formula: preserve the three Fs, for 'fuel' (meaning oil and gas), 'fertiliser', and 'foreign exchange'," Sitharaman was quoted as saying in the report.
"All imports, not just essential goods, are paid for in foreign currency, such as the dollar," explained the minister, adding that "By encouraging carpooling, for example, we preserve foreign exchange reserves".
"We have maintained subsidies on fertiliser purchases, which can amount to 2,700 rupees (25 euros) on a bag costing 3,000 rupees (28 euros). We haven't increased the price paid by farmers, but this comes at a cost in foreign currency," for the country, said FM Sitharaman.
She further stated that "Gold is sacred to Indian families. It is offered in temples, it is kept for the daughters of the family. And yet, we had to explain to households, who accumulate large quantities of gold, that importing it requires paying in foreign currency".
Meanwhile, India and France discussed potential areas for greater bilateral cooperation in critical minerals, economic sovereignty and security policies, and further enhance the financial industries connect between both the nations.
FM Sitharaman and Roland Lescure, Minister of Economy, Finance, Industrial, Energy, and Digital Sovereignty of France, co-chaired the India-France Economic and Financial Dialogue (EFD) in Aix-en-Provence.
"As the economic relationship between India and France deepens within the broader framework of the special global strategic partnership, resuming high-level exchanges on international outlook, bilateral cooperation and outcome-oriented solutions had become essential," according to an official statement.
— IANS
Reader Comments
The free trade agreement with EU is a big deal. It's not just about exports, it's about positioning India as a global manufacturing hub. But I do worry about small farmers getting squeezed—subsidies only go so far when prices rise. Hope the government has a safety net.
I liked the part about gold—it's so true. In our family, gold isn't just an investment, it's part of weddings, festivals, everything. Asking people to postpone buying gold is a tough sell, but I understand the logic. Better than begging for foreign loans!
FM should also talk about controlling luxury imports. Why are we still spending billions on non-essential Chinese electronics? Make in India should also mean buy Indian. The carpooling advice is nice but not practical in cities without good public transport.
The EU-India FTA could be a game changer for farmers and small businesses if implemented well. But I'm skeptical—every time we sign such deals, our domestic industries suffer. Let's see how the government protects our interests. Otherwise, good strategy overall.
I appreciate FM's transparency about the fertilizer subsidies—2700 rupees on a bag costing 3000 is huge! But farmers need more support, not just subsidies. The government should invest in irrigation tech and better seeds so we're less dependent on imported inputs.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.