Economy needs support from govt, RBI: FM Sitharaman

LONDON/ DELHI: Finance minister Nirmala Sitharaman said on Wednesday that the govt is focusing on ensuring that domestic demand stayed strong to maintain the underlying strength of the Indian economy. Her comments come amid fears that US tariffs would cause global slowdown, which also prompted RBI to lower the forecast for the current fiscal year.

While backing RBI's latest rate cut, FM said the Indian economy would require support from both the central bank and the ministry to maintain growth in the face of global uncertainties induced by the US tariff hikes. "The ministry has been keeping pace with certain policy decisions and also in the Budget, several announcements have been made to invigorate growth and now, therefore coming to this decision (rate cut) is absolutely welcome," Sitharaman said.

On the long-term impact of US tariffs on Indian imports, she said that the Indian govt was studying the duties and also pursuing an "ambitious trade agreement" from which both the US and India can benefit. "So that is one side, and the other is that the US is the largest trading partner for India. But even with that said, India's economy is largely driven by domestic demand and consumption," she said.