2026 more challenging than 2025, room for RBI rate cut: Nirmala Sitharaman

Finance Minister Nirmala Sitharaman said on Monday that 2026 is more challenging than the previous year. Despite rising debt, she said, the country's economic position continues to be strong. Her remarks come roughly a month after official data showed that the country's GDP growth slowed to 7.8 per cent in the October-December quarter as government spending and private investment eased, though the nation continued to defend its position as the world's fastest growing major economy aided by strong consumption.

Here are key takeaways from her latest remarks:

Tensions in the Middle East have now become a global issue: Nirmala Sitharaman

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The finance minister said that Middle East tensions have turned into a global issue.

Her remarks came as the West Asia conflict -- which began with joint US-Israel strikes against Tehran that killed Iran's Supreme Leader, triggered Iran's retaliatory action against several of its Middle Eastern neighbours and led to the blockage of the Strait of Hormuz -- is in its sixth week.

US President Donald Trump has warned of major escalations against Iran unless it reopens the strait -- a maritime crucial for 20 per cent of the world's oil and gas supplies.

Trump is due to speak later in the day.

Meanwhile, India has endured the West Asia crisis by ramping up its energy production and diversifying related imports.

Officials have urged citizens not to panic-book or panic-buy auto and cooking gas, assuring adequate supplies of petrol, diesel and LPG.

The FM also said that the country's economic position remains strong despite rising debt.

Last month, the government, in consultation with the RBI, announced its borrowing programme for the first half of the next financial year, with plans to raise Rs 8.2 lakh crore in six months. That marks around 51 per cent of the full-year budgeted borrowing.

As per the official borrowing calendar, the annual gross borrowing stands reduced to Rs 16.09 lakh crore from an earlier estimate of Rs 17.2 lakh crore.

Forex reserves can cover 11 months of imports: FM

The Union minister said that the country's position in foreign exchange (forex) reserves is quite strong.

She also said that the current level of reserves can cover about 11 months of imports.

Forex reserves are holdings by a country's central bank -- in this case, the RBI -- in assets such as foreign currencies and gold -- that collectively ensure financial stability and back domestic currency.

If needed, central banks can use these assets to manage currency stability and finance international trade.

These assets enable them to intervene in foex markets to stabilise national currencies. They also provide a buffer in economic crises.

Room for RBI rate cuts: FM

Sitharaman also said that there is room for the RBI to cut rates.

"The government has space,” she said.

Earlier on Monday, the RBI began a schedule policy review, the outcome of which is due at 10 am on April 8.

Most economists expect no change in the upcoming MPC review.

At the February policy review, the RBI governor-chaired Monetary Policy Committee decided to keep the repo rate -- the benchmark interest rate -- as well as the policy stance unchanged at existing levels. Both decisions were taken unanimously.

Currently, the repo rate -- or the key interest rate at which the RBI lends short-term funds to commercial banks -- stands at 5.25 per cent and the policy stance at 'neutral'.

The MPC, which is the central bank's top rate-deciding panel, normally meets six times a year to deliberate on key rates and policy and any additional number of times in emergencies.

At the February review, the RBI governor had said that the economy continues to register high growth despite a challenging external environment clouded by geopolitical uncertainties, with benign inflation providing the leeway to remain growth-supportive while preserving financial stability.

He also reiterated the central bank's commitment to meeting the productive requirements of the economy while sustaining growth momentum.

States must support financial reforms: Nirmala Sitharaman

The Union minister also said that states and UTs must support the central government's financial reform initiatives.

Viksit Bharat 2047 (Developed India 2047) journey long and challenging

She also said that the nation's journey towards the government's 'Viksit Bharat 2047' (Developed India by 2047) vision is "long" and "challenging”.

(This is a developing story. More details will be added shortly.)