The intensification of tariff wars and the rise of protectionist policies have the potential to disrupt global supply chains, increase production costs and create uncertainty in investment decisions across borders as well, Union Finance and Corporate Affairs Minister Nirmala Sitharaman said on Thursday.
“This has had a ripple effect on the financial markets across the globe and including our own market,” she said while speaking at function organised by the BSE to celebrate its 150 years of existence in Mumbai.
“We recognise that the global landscape is changing and changing rapidly and the world is going through a phase of trade calibrations. The recalibration efforts on trade are very, very challenging. It is not worrisome, but it is also going to be very challenging,” she emphasized.
Talking about a familiar acronym called VUCA she said “It is a VUCA world. It is full of volatility, uncertainty, complex and ambiguous paradigms which are shifting every day.”
“One thing stands firm, the strength of the Indian economic fundamentals and the macroeconomic prudence with which the economy has been managed,” she added.
She said India was confident of navigating these global disruptions with policy agility and long term vision. “Our focus remains firmly on building robust domestic foundation and the foundation is laid and strengthened through infrastructure development, inclusive growth and deeper regional cooperation,” she said.
“These are not just buffers to external shocks but accelerators for our long term growth aspirations,” she stated.
Emphasizing that India stands at a defining point in its economic journey, she said sooner it would be will be the 3rd largest.
“I look forward to that day because it will mark the high water mark where India can reach, purely on the back of the efforts of our own institutions and it is thereafter that the efforts will be much more required towards maintaining and moving upwards, which can become very, very challenging,” she said.
“To reach 3rd position itself is of immense pride, but to sustain ourselves there will require a lot more planning and taking ourselves forward,” she added.
Talking about the significance of the capital market in the growth of the Indian economy she said in the year 2000 only one BSE listed company had market cap of ₹1 lakh crore that number grew to 30 before pandemic and now the number has sharply risen to 81 today and that is a very big thing for an emerging market country.
“I don’t need to reinforce the significance of this one achievement,” she said.
“There are at least 55 companies today with over a million investors each from a little more than a handful of just 7 in 2014. So, it is spreading,” she added.
Highlighting the retail investors’ participation in the stock market in the last few year as significant, she said this increase over the last two decades was a reflection of India’s strong economic fundamentals, implementation of crucial reforms and also a steadily growing investor base.
“India’s financial markets have shown remarkable resilience despite recent global uncertainties,” she pointed out.
She said domestic investors, particularly the institutional investors, have played an increasingly central role in the growth of the markets. In the last financial year, Domestic Institutional Investors (DIIs), recorded total inflows of ₹6.1 lakh crore, far outpacing the ₹1.3 lakh crore net outflows from Foreign Portfolio Investors (FPIs).
“This transition of DIIs from a supporter to a dominant force underlines the growing maturity and depth of India’s capital market. And I think this happening in the 150th year of BSE marks a major impact-changing profile to the Indian stock markets,” she emphasized.
She said today India has become the top country globally in IPO volume, surpassing the US. “This reflects the growing preference for equity-based financing and the strong trust placed in India’s economic prospects by both the domestic and international investors,” she said.
She said the markets added a record of 4.1 crore Dmat accounts in February 2025 and the total number of DMAT accounts is now 19.2 crore.
She said she was surprised to know that BSE has a capacity to process 1,500 crore orders per day which means the average time taken to complete a transaction is less than 200 microseconds.
“That is where a traditional, nearly 150 years as of today, institution has utilized technology to transform itself.” she said.
She said the growth of Sensex from around 550 points in 1986 to the high of 80,000 points in July 2024 mirrored the resilience and the growth potential of the Indian economy itself.
“This is a barometer to show where the Indian economy is strengthening, where it is moving towards and therefore, even as we celebrate 150 years, we are celebrating how you mirror the growth potential of the Indian economy,” she pointed out.
She said the role of the capital markets in India’s growth story had never been more important than it is now. Driven by a strong regulatory architecture and enabled by reforms such as dematerialization, T+1 settlement, direct market access and mutual fund penetration, India has built one of the most robust market infrastructure in the world.
Talking about a recent incident wherein Indian and British officials discussed about T+1 she said, “It gave me immense satisfaction to sit in London to tell them that we are far better than them in terms of dealing with this [faster settlement]. I could see it in the highest of decision makers in the UK that T+1 is something which is like a polestar which they have yet to reach.”
“In FY25 capitalisation of India’s stock markets crossed US$5 trillion mark. For the first time, making India the fifth largest capital market globally. Over the past five years, our indices have delivered an impressive 131% dollar adjusted return, the highest among global peers.” she said.
She said today, with a market capitalisation of over Rs 400 lakh crore, the BSE is among the world’s top stock exchanges.
“Our vision for India’s capital markets extends beyond scale. We are building markets that are inclusive, accessible and resilient,” she said.
The FM said to truly democratize investments, stock exchanges must continually innovate and design products that are accessible, understandable and aligned with the risk appetite and saving behavior of the citizens.
She said the world was looking towards India, not just for Its impressive growth trajectory or demographic strength, but for the example that can be set with integrity, inclusivity and innovation.
Capital markets are not merely financial instruments, they are a reflection of our nation’s maturity, economic maturity and democratic spirit.
Published – April 17, 2025 09:16 pm IST
