Nirmala Sitharaman calls for global action on economic imbalance, urges fair burden-sharing

Finance minister Nirmala Sitharaman on Thursday called for coordinated global action to address economic uncertainty and secure inclusive growth, while stressing that developing countries should not bear a disproportionate burden in correcting global imbalances.

Sitharaman was speaking at the virtual Global Convergence for Growth Summit, chaired by French President Emmanuel Macron and attended by leaders of G7 nations as well as India, Brazil, China, Kenya, South Korea and the International Monetary Fund (IMF).

Representing India, she underscored the need for stronger multilateral cooperation amid deepening global challenges.

“In today’s interconnected world, prosperity and challenges are shared, but the consequences of conflicts and uncertainty fall disproportionately on developing countries and the Global South. The situation demands coordinated global action. We must strengthen multilateral cooperation to build resilient economies, accelerate sustainable development, and ensure inclusive growth that benefits all,” she said.

On global imbalances, the finance minister cautioned against a one-size-fits-all approach, noting that they arise from diverse structural factors. “Not all imbalances are alike, some reflect differences in demographics, development stages, resource endowments, or economic structures. Our focus should, therefore, remain on excessive and persistent imbalances while recognizing that the scale of domestic needs varies significantly across countries,” she said.

Speaking on behalf of the Global South, Sitharaman said countries not responsible for creating global imbalances often bear their consequences.

“The burden of adjustment should not fall disproportionately on countries that are not the drivers of these imbalances. India, like many developing economies, remains largely peripheral to both the origination and propagation of global imbalances; yet, we continue to face their spillover effects,” she said.

Highlighting India’s economic performance, she said growth continues to be driven primarily by domestic demand and supported by market-based mechanisms.

“Our growth is primarily domestic-demand led, with a largely market-determined exchange rate. India continues to be among the world’s fastest-growing major economies, with GDP growth projected to remain robust at around 7% over the medium term,” she said.

The finance minister also stressed the need to strengthen confidence in multilateral institutions and make them more responsive to developing economies. She called for “better, bigger, more effective and more representative” multilateral development banks (MDBs) capable of delivering significantly higher financing to emerging and developing countries.

According to Sitharaman, enhancing the financing capacity, operational agility and responsiveness of MDBs would be critical to supporting sustainable development goals.

She further highlighted the importance of resilient and geographically diversified supply chains, particularly for critical minerals. Greater focus on circularity, recycling and urban mining, she noted, could help ease global sourcing pressures.

Concluding her remarks, Sitharaman reiterated India’s commitment to working with international partners to build a more resilient, inclusive and prosperous global economy and advance collective solutions for shared growth.