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Finance Minister Nirmala Sitharaman, speaking at the Kautilya Economic Enclave 2025, said India’s resilience will define its place in a turbulent world. With geopolitical tensions and shifting trade chains, she stressed India’s shock-absorbing strength, evolving influence, and proactive role in shaping global cooperation.
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00:00At the same time, geopolitical conflicts are intensifying.
00:05Sanctions, tariffs, and decoupling strategies are reshaping global supply chains.
00:14For India, these dynamics highlight both vulnerability and resilience.
00:21For developing countries, this is a necessity, not just a romantic aspiration.
00:27We cannot afford to be passive spectators.
00:32In a world where decisions elsewhere determine our destinies, we must be active participants,
00:41shaping outcomes where possible and preserving autonomy where necessary.
00:47Today, we find ourselves in a shifting global landscape that resembles a zero-sum approach,
00:55in part, a consequence of the failures and limitations of the era of globalization that preceded it.
01:06Good morning and welcome to this fourth edition in which the Institute of Economic Growth
01:14and the Ministry of Finance are together holding the fourth edition.
01:21And I thank Sri NK Singh for persistently building on edition after edition.
01:41The gathering and the domain of experts with whom he gets in touch and brings them over
01:53has absolutely meaningful participation and the outcomes have always been very useful
02:02useful for all of us to see where our next steps should lie.
02:07So in that regard, the fourth edition for me gives me the confidence that Indian policymaking
02:16is guided by a good churn at the conclave and the outcomes have not just helped in our policymaking
02:26but also in holding global conferences and the G20 of 2023 stands out as a classic example where,
02:37with some hope, we were still able to get thinking heads and observers together to talk about the pressing issues
02:49of reforming the multilateral institutions.
03:00NK Singh did make an observation that further and further dilution of multilateral institutions is chiseling away,
03:11if I can say, or chipping away the confidence the global community had had that somehow we will be able to come around to strengthening these institutions
03:22because they were the ones which held out during times of need.
03:27However, with these thoughts at the back of our minds, let me formally give my thoughts here,
03:39which largely pertain to the global situation which a country like India,
03:50aspiring to take a twin-track approach to this seeking of prosperity which has been long denied to us,
04:02not denied by anybody else but denied by factors which didn't help us to project and move faster some of our own making
04:13and some global situations and the uncertainties.
04:17But today, Honourable Prime Minister has actually set the two tracks in motion, one being reaching by 2047 a position where you are able to say that you are a developed country,
04:36Vikasit Bharat. If that is one of the tracks, the other track is how do you reach that unless you are Atmanirbar,
04:45unless you are self-reliant. Largely, it does not for a moment mean that we want to shut our economy and make ourselves look inward.
04:57So if the twin track is ready before us and we will have to not go on a speed which in terms of numbers at four, at five, at five and a half of GDP but reach 8% of GDP is the one which can give us the speed to reach the destination by 2047.
05:20So with that, as a background largely, I would like to say that it gives me great pleasure to be here among such an esteemed gathering.
05:32And I would like to extend my congratulations to N.K. Singh, the President of the Institute of Economic Growth and Dr. Sabia Sachi-Khar, Director of the Institute of Economic Growth,
05:45for convening the fourth edition of the Kautilya Economic Conclave.
05:51We are in an era of unprecedented global uncertainty and volatility. This conclave provides an invaluable opportunity to bring together distinguished economists and policy makers,
06:06sharing ideas, sharing ideas and engaging in meaningful discussions to solve critical common challenges which most nations face is absolutely responsibility that this gathering cannot shirk away.
06:24Today, the theme before us, seeking prosperity in troubled times or turbulent times, mirrors the aspirations of each one of the nations and the world as a whole who are looking to get out of this uncertainty.
06:40So we gather at a time when the very foundation of the global order are shifting beneath our feet. The world that emerged after the end of the Cold War, which led to the expansion of globalization, open markets and the pursuit of multilateral cooperation now appears to be a relic of the past.
07:05For three decades, a contested equilibrium allowed nations to pursue prosperity through integration and interdependence. That equilibrium has inevitably been appended and the rules of international engagement are being rewritten, stating that the present is turbulent in some sense would be an
07:35understatement. The scale of the challenge. The scale of the challenge which is in our hand is rather too big. So we will be understating the scale of the challenge at hand. What we face is not a temporary disruption, but a structural transformation.
07:57The question therefore is, and this is something on which I will request the gathering to ponder and come out with some answers because none of what I am going to say are answers to the problem which are in our hand.
08:13But problem exists and we will have to find solutions. So the question is, what lies on the other side of this transformation? If indeed this uncertainty, if indeed this temporary, not temporary disruption, but indeed the uncertainty is a structural transformation.
08:34What lies on the other side? What lies on the other side? What will the new equilibrium look like? And who will shape it? And on what terms will it be shaped?
08:53These questions are not easily answered as this equation has to be taking into consideration very many variables, not just a few, but many variables. Shifts that once transpired over decades are now condensed into months and or even weeks.
09:20And tangled with these are the policy makers, and tangled with these are the policy makers, wrestling with unforcing challenges, searching for an equilibrium.
09:30So by definition, epochal historical turning points do not come around every year. That's why they are epochal. For most of us in our lifetime, the arc of history never bends.
09:50It is linear. It is linear. We only see the upward slope. That is why we sometimes make the mistake of only seeing the upward slope of projecting history linearly.
10:04This is also why confidence in continuity. This is also why confidence in continuity has rapidly waned as we experience the arc of history bending now, giving way to pervasive doubt.
10:27The global economy itself reflects this. And how? Low investment, high cost of capital, volatile energy prices, and the ever-present tension between growth, stability, and sustainability.
10:47For decades, many Asian nations absorbed the material gains of globalization without adopting the same political values that represented or underpinned the Western society.
11:03Today, they assert alternative models of growth and governance, drawing on their civilizational continuities. Their emergence questions the assumption of the Western liberal values are the only path to economic success.
11:22These nations have become central pillars of the global order in economic, political, and technological terms. The absolute dominance, once enjoyed by a hegemon, is now contested.
11:41In this context, therefore, India's rise as a stabilizing force is neither accidental nor transient. Instead, it results from a powerful combination of various factors.
12:01India has improved quality of influence.
12:02India has improved quality of capital expenditure. And draining in inflationary pressures has been consistent.
12:10We have implemented strategic reforms that enhance the ease of doing business, promote financial inclusion, and improved the quality of life for the average citizen in the country.
12:24With the steady share of consumption and investment in the overall GDP over the years,
12:33India's growth is firmly anchored in its domestic factors,
12:40which minimizes the impact of external shocks on overall growth.
12:46As a result, the Indian economy is resilient, continues to grow sustainably.
12:52However, just as eternal vigilance is resilient, continues to grow sustainably.
12:59However, just as eternal vigilance is the price for liberty,
13:05eternal performance is the price of strategic independence.
13:10There is no room for complacency or self-regulation beyond a quiet confidence in our abilities
13:19to take the right decisions and to execute them.
13:22For many smaller developing nations, the current geopolitical environment poses fundamental questions.
13:32To be sure, there are risks and opportunities.
13:36But questions do loom large.
13:42Will the world remain unipolar?
13:45Or are we entering a truly multipolar age if multipolarity is our future?
13:52What shape will it take?
13:58Will it be one of cooperative pluralism?
14:02Where different models coexist?
14:07Or will it harden into rival blocks and spears of influence?
14:13Getting back to the old jargon.
14:15Forcing nations to pick sides.
14:21History offers no guarantees.
14:24But the possibility of a fragmented world with multiple centers of power
14:29and competing values appears to be more likely.
14:36Appears to be more likely.
14:38So the trade-offs and imbalances, we need to spend a minute on that.
14:47So the questions that we asked are not abstract.
14:50They directly impact lives of our citizens.
14:56For nations still climbing the development ladder,
15:01the trade-offs are particularly acute between energy transition and energy security.
15:10Between the imperative of growth and the urgency of sustainability.
15:15So these are questions which are hitting the common man's lives.
15:20Between the drive for innovation and the realities of the labor markets.
15:25Rich with young populations.
15:27Between attracting capital and the burden of high borrowing costs.
15:35Between the demands of productive investments.
15:39And the temptation of financialization.
15:45These trade-offs define our options.
15:49They are not easily resolved.
15:52Yet, they cannot be ignored.
15:54These trade-offs are accentuated in a world with trends desiring and with trends towards de-risking,
16:08decoupling, and hence slowing globalization.
16:14Globalization, economic integration, and immigration are not natural states of affairs.
16:21They can unravel under pressure as they have in the past.
16:29Today, we find ourselves in a shifting global landscape that resembles a zero-sum approach in part.
16:39A consequence of the failures and limitations of the era of globalization that preceded it.
16:48So overlaying these in a world of profound imbalances, trade imbalances have hollowed out industries in some nations while creating overcapacity in others.
17:06Financial imbalances have concentrated wealth in speculative sectors while depriving the real economy of investment.
17:15Energy imbalances have made some societies chronically dependent on costly imports,
17:26even as others subsidized their industries with cheap, carbon-intensive power.
17:33Net zero commitments pursued with regard to trade-offs, risk driving up costs for developing economies while constraining their growth.
17:48These imbalances have become structural features of our world, distorting incentives, fueling political discontent, and so on.
18:01So the task before us, therefore, is not simply to manage uncertainty, but to confront imbalances.
18:12We must ask ourselves, how can we build a global order where trade is fair, finance serves productive ends,
18:26energy is both affordable and sustainable, and climate action aligns with development imperatives?
18:33How can international institutions be reformed to reflect today's realities rather than yesterday's hierarchies?
18:46And crucially, how can the voices of developing nations no longer marginalised in rulemaking be amplified in shaping the future?
19:03The choices we face are stark, and already we see efforts to re-imagine the global financial system itself.
19:11Innovations like stable coins are transforming the landscape of money and capital inflows.
19:21These shifts may force nations to make binary choices, adapt to new monetary architecture, or risk exclusion.
19:35Such developments underscore the scale of transformation which is underway.
19:41They also remind us that no nation can insulate itself from the systemic changes.
19:49Whether we welcome these shifts or not, we must prepare to engage with them.
19:56At the same time, geopolitical conflicts are intensifying.
20:01Sanctions, tariffs, and decoupling strategies are reshaping global supply chains.
20:09For India, these dynamics highlight both vulnerability and resilience.
20:17Our capacity to absorb shocks is strong, while our economic leverage is evolving.
20:26Our choices will determine whether resilience becomes a foundation for leadership or merely a buffer against uncertainty.
20:36So, in conclusion, history teaches us crises often precede renewal.
20:45The fragmentation we see today may give rise to more sustainable and unforeseen forms of cooperation.
20:54The challenge is to ensure that inclusive principles shape cooperation.
21:00For developing countries, this is a necessity, not just a romantic aspiration.
21:08We cannot afford to be passive spectators.
21:11In a world where decisions elsewhere determine our destinies, we must be active participants, shaping outcomes where possible and preserving autonomy where necessary.
21:27As we reflect on these issues, let us recognize that many of these questions I have raised today may not have clear answers.
21:39Indeed, it may be unwise to seek definitive answers at this stage.
21:44The value of this gathering lies precisely in its capacity to wrestle with uncertainty, recognize and examine imbalances,
21:57deliberate on trade-offs, particularly those of our time, and be open to the possibilities we may not have considered earlier.
22:07So, this must be guiding, this must be the guiding vision for our takeaways from these three-day conference.
22:20The themes before us are not isolated strands.
22:24They are a part of a single large tapestry.
22:27How we interpret this tapestry and how we choose to act with it will shape the contours of our century.
22:37It is a big ask and a big task.
22:41As more often than not, we tend to have a natural conflict of interest when contemplating adverse scenarios.
22:50If we accept them as possibilities, we must act and drastically refashion our lives.
22:58However, we must ask difficult questions and address their profound implications.
23:05If we are to make sense of seemingly inexplicable events, we have to stretch our mental faculties more than usual.
23:15Let us, therefore, treat this moment not only as a crisis, but as an inflection point.
23:25Let us converse, not only to ponder upon what future awaits us, but also to lay out the contours of the future we wish to create.
23:36And let us proceed with humility that, while history may sweep in wide arcs, the choices we make today will decide whether its currents carry us or help steer its course.
23:56Above all, let us weigh every possible option with intent and strive for constructive dialogue.
24:06In doing so, I think we will ensure that the outcomes of this gathering can help sharpen our clarity and cast light on the shadows of an uncertain future.
24:19So, let us see that.
24:20Let us see.
24:21Let us see.
24:22Let us see.
24:26Let us see.
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