Can India Power Global Growth? Nirmala Sitharaman Says 'Yes', Thanks to Domestic Demand

At a time when conversations around the global economy are steeped in caution, India is sending out a message of quiet confidence. On her official visit to the UK, Union Finance Minister Nirmala Sitharaman spoke to a packed gathering at the High Commission of India in London, laying out India’s economic strategy in the face of international volatility.

The event—titled “Opportunities and Challenges for India’s Quest to Become a Developed Economy by 2047”—was part of her broader diplomatic engagement and strategic outreach in the UK. But what made headlines was her steadfast belief that India’s growth story is not just surviving global headwinds—it’s thriving, thanks to resilient domestic demand.

“The world has experienced depressed growth over several years,” Sitharaman said, striking a cautionary tone. “Initially, it was a prolonged period of low interest rates, and now we’re facing an era of low growth for long. That’s not good news for anyone.”

In the backdrop of rising tariffs, protectionism, and fractured global trade alliances, Sitharaman’s optimism didn’t sound misplaced—it sounded earned.

Domestic Demand: India’s Secret Weapon?

For the fifth year in a row, India holds the title of being the fastest-growing major economy in the world. While global markets continue to face inflationary pressure, supply chain disruptions, and regulatory tensions, India’s economy has shown remarkable resilience.

And that’s not by accident. It’s by design.

“India's economic story is backed by consumption at home. The demand for goods that meet global standards is only growing, and this creates a solid foundation for sustained growth,” she said.

This focus on domestic demand is no longer just about numbers—it’s becoming a defining feature of India’s global economic identity. Whether it's startups creating innovative solutions for Bharat or large conglomerates setting up manufacturing hubs across the country, the message is clear: India is not waiting for the world to catch up—it’s moving forward with its own people at the helm.

Why This Matters for Startups

For the Indian startup ecosystem, Sitharaman's words carry profound relevance. In an environment where global investors are becoming risk-averse and funding is getting selective, the strength of India’s internal market could be the difference between scaling and stalling.

Whether it’s consumer tech, health, fintech, edtech, or agritech—most Indian startups are increasingly building for India first. And now, that strategy is being validated at the highest levels of government.

Sitharaman emphasized that globalisation has helped India build competitiveness, especially since the economic liberalisation of the 1990s. But in today's new world order—with shifting alliances and changing trade flows—India’s own consumption is its insurance policy.

US Tariffs and the Changing Face of Global Trade

In a strikingly candid remark, the Finance Minister acknowledged the emerging protectionist stance of the United States, particularly in the form of new tariffs and trade policies.

“At a time when global trade is being shaped by tariff barriers, we must continue to strengthen our domestic demand. It acts as a powerful magnet for global suppliers and must be sustained and further enhanced,” she explained.

This is more than just economic theory—it’s a roadmap. The idea is simple but powerful: If external trade ties are unstable, let the internal engine roar louder.

FDI: The Confidence of the World in India's Market

India is no longer just a market of 1.4 billion people—it’s also a platform for innovation, a hub for manufacturing, and a magnet for global capital.

Sitharaman noted that international firms are now looking to India not just as a consumer base, but also as a strategic export hub.

“We firmly believe that India, along with a few other emerging markets, will be key engines of global growth. If the world is to come out of this period of low growth, it will be because of the performance of these emerging economies,” she said.

In recent months, we’ve seen global tech giants doubling down on India investments, supply chain shifts benefiting Indian MSMEs, and homegrown unicorns spreading their wings globally. From semiconductors to EVs, foreign investors are eyeing India as a growth hotspot—and the government's messaging is aligned with that vision.

India@2047: A Vision of a Developed Nation

As India aspires to become a developed economy by 2047, Sitharaman’s message is a timely reminder that self-reliance and global ambition are not mutually exclusive.

Her UK visit includes engagements aimed at boosting bilateral economic ties with Britain, exploring investment opportunities, and reinforcing India’s position on the world stage—not as a beneficiary, but as a partner in progress.

The big takeaway from Sitharaman’s London address? That India's growth story is not built on fragile exports or borrowed capital—but on its people, its consumers, its entrepreneurs.

And in a world full of uncertainties, that’s perhaps the most stable foundation a country can have.

For the Indian startup ecosystem, the message is clear: build for India, and the world will follow.