Lagatar24 Desk
New Delhi: Finance Minister Nirmala Sitharaman has said it would be premature to comment on the potential impact of the recent US tariff escalation on the Indian economy, adding that the Commerce Ministry is closely monitoring the developments.
Cautious Response on US Tariff Hike
Reacting to the US Supreme Court declaring former President Donald Trump’s tariffs illegal and the subsequent imposition of revised tariffs—initially 10% and later increased to 15%—Sitharaman stated that it is too early to assess the implications for India. On the ongoing US trade negotiations, she said India is on a clear path and cited trade agreements with the UK and the EU as examples of constructive engagement. She emphasized that India’s priority is to expand its economy and ensure Indian products reach international markets. She also informed that an Indian delegation is expected to visit the United States for further discussions.
Banking System and RBI Board Meeting
Speaking about her recent meeting with the Reserve Bank of India (RBI) board, the Finance Minister said discussions focused on strengthening the banking system. She urged banks to prioritize customer needs and improve core banking functions. Recalling past practices, she remarked that there was a time when banks were under pressure to extend loans indiscriminately, making an indirect reference to the previous UPA government and the culture of sanctioning loans based on phone calls.
She said banks were earlier instructed not to lend beyond their capacity and to instead strengthen their balance sheets, improve current and savings accounts, and become more competitive in the market.
Improved Capital Position and Growth
Sitharaman noted that after regulatory tightening, banks are now performing better, with sufficient capital and a growth rate of 10–11%. Addressing concerns over mis-selling in the banking sector, she said citizens faced inconvenience as banks aggressively sold insurance products even where they were not required.
RBI Governor Highlights Strong FDI and Reserves
On the sidelines of the discussion, RBI Governor Sanjay Malhotra referred to the recent AI Summit and said India is attracting investments worth billions of dollars. He added that even partial inflows from these commitments would significantly boost Foreign Direct Investment (FDI). The Governor highlighted that gross FDI remains strong and India currently holds substantial foreign exchange reserves.
