Union Finance Minister Nirmala Sitharaman on Monday said the government and the Reserve Bank of India (RBI) will take additional measures to attract foreign capital into India, while stressing that continuous reforms, innovation and institutional strengthening are essential to sustain the country’s long-term economic growth.
Speaking at the Mindmine Summit 2026, Sitharaman said India has performed reasonably well on the economic front and remains supported by strong domestic demand, but cautioned against complacency in the face of evolving global and domestic challenges.
Addressing concerns over foreign institutional investor (FII) holdings and capital flows, the Finance Minister said India requires greater foreign capital participation and that policymakers are adopting a calibrated approach to facilitate investments.
She highlighted recent measures aimed at making India’s bond market more attractive to overseas investors. According to her, the government and RBI have undertaken policy initiatives, including easing compliance requirements through the Fully Accessible Route (FAR) framework and offering favourable withholding tax treatment to improve investor sentiment.
Sitharaman described these measures as the beginning of a broader strategy to attract capital inflows.
“Certainly, that’s not the end of the story. We’ll be doing more. We recognize we need more foreign capital to come in,” she said.
The Finance Minister also referred to the RBI’s decision to allow public sector undertakings and banks to raise funds from overseas markets under a structured framework. She noted that currency-related hedging costs under the framework would be borne by the RBI, helping institutions access global capital markets more efficiently.
“As a result, the banks can now go unfettered to raise capital from outside,” she said.
Sitharaman observed that India’s large domestic market and rising consumption levels provide resilience against global economic uncertainties. However, she pointed to challenges such as volatility in crude oil prices, supply chain disruptions, geopolitical tensions, rising insurance costs and weather-related risks that continue to affect economies worldwide.
The Finance Minister said economic growth alone is not sufficient and must be supported by strong institutions, effective policy frameworks and efficient implementation mechanisms.
“I know that our country is doing reasonably well, but we must continue to evaluate our performance carefully and identify areas where further improvement is needed,” she said.
She emphasised that policy frameworks must remain robust and adaptable as the global economic environment evolves. While several sectors have recorded strong growth, she noted that some areas involving complex and intermediate products and services continue to require focused policy attention.
Sitharaman said policymakers must continue exploring structural reforms and innovative approaches to address long-standing challenges and ensure that the benefits of growth reach all sections of society.
Referring to the impact of climate conditions on the economy, the Finance Minister said the government is preparing for the possibility of a weaker monsoon due to the El Niño phenomenon.
“Some areas are going to be dry and some others are going to have excessive rain. That’s a year-long concern. But this year, because of El Niño, I think we are preparing for a not-so-good monsoon,” she said.
She added that the government remains vigilant about emerging economic developments and is committed to strengthening India’s long-term growth prospects through sustained reforms and policy support.
(Input from agencies)
