Nirmala Sitharaman Urges Global Economic Resilience and R&D Investment

Finance Minister Nirmala Sitharaman declared that uncertainty is now a standing condition of the global economy during the Kautilya Economic Conclave 2026 in New Delhi. She argued that national security requires structural autonomy in strategic inputs to replace fragile, single-source dependencies with domestic operational depth.

Sitharaman distinguished between price shocks, which can be managed with fiscal tools, and quantity shocks, which test the physical capacity of the state. She cited disruptions in the Strait of Hormuz and conflicts involving Russia, Ukraine, and Iran as examples of threats to energy supplies. To counter these vulnerabilities, the Government of India has implemented the National Critical Mineral Mission, Rare Earth Corridors, India Semiconductor Mission 2.0, and programs for small modular nuclear reactors.

On the domestic front, Sitharaman called for the private sector to lead the next investment cycle in research and innovation. She noted that India's R&D expenditure is 0.83% of GDP, significantly lower than the 2.7% seen in OECD nations. To bridge this gap, the government introduced a ₹1 lakh crore Research, Development and Innovation Scheme to transition the economy from Made in India to Imagined and Made in India.

Despite global headwinds, including U.S. tariffs, Sitharaman reported that India remains the fastest-growing major economy with real GDP growth of 7.8% in the first quarter of 2026-27 and foreign exchange reserves of approximately $766 billion. She advocated for open, predictable, and rules-based global economic relationships, urging nations to resolve geopolitical differences through dialogue rather than trade barriers.