India managed West Asia crisis, remains fastest-growing major economy: Sitharaman

Finance Minister Nirmala Sitharaman said India successfully managed the economic impact of the West Asia crisis through prudent resource management, strong domestic consumption and trade agreements, enabling it to remain the world's fastest-growing major economy while strengthening strategic cooperation with France

New Delhi: 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, registering strong growth, amid signing free trade agreements (FTAs) 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.”

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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.