- Finance Minister Sitharaman linked gold price rise to India's heavy import dependence and seasonal demand
- Sitharaman said US tariff issues are under review with no detailed comments yet due to early stage
- India remains committed to steady trade deal strategy despite uncertainties in US-India negotiations
In an address to media after the customary Post-Budget meeting, the FM Nirmala Sitharaman and RBI Governor Sanjay Malhotra explained their stance on the US tariffs, and the broader economy. On the recent surge in gold prices, Finance Minister Nirmala Sitharaman said the rise in gold and silver prices is largely driven by India's heavy import dependence, noting that almost all the gold entering the market is imported and that existing steps, while helpful, are still not enough to match robust domestic demand.
She added that gold continues to be a preferred household investment and that the current surge in buying appears to be seasonal rather than structural.
The government is closely monitoring the situation, she said, but it has not reached any alarming level, with the Reserve Bank of India also keeping watch. Sitharaman pointed out that the trend is not unique to India, as many countries — particularly central banks — are actively purchasing gold and silver, contributing to significant volatility in international prices.
The Finance Minister, responding to questions on the latest twist in the U.S. tariff situation, said the Commerce Ministry is currently reviewing the matter, and also refrained from offering specifics at this stage, noting it is “a bit too early” for detailed comments.
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Sitharaman, responding to questions on uncertainties linked to the ongoing US–India trade deal, said that unpredictability is a natural part of any major negotiation but stressed that India remains clear and consistent in its approach. She noted that the government has successfully concluded free trade agreements with several countries in recent years, underscoring that the broader strategy and direction for trade pacts remain firmly in place.
“Uncertainties are always there,” she said, adding that India will continue pursuing trade deals with the same steady framework and long‑term commitment that has guided its earlier agreements.
On the broader economy, the RBI Governor emphasised that India has adequate liquidity and sufficient credit availability for at least the next five years. Addressing concerns around the reported fraud at IDFC First Bank, Malhotra said the RBI does not comment on individual institutions but stressed that there is no systemic issue in the banking sector.
On the central bank's stance on rates and liquidity, he reiterated that monetary policy decisions will continue to be taken “on a meeting‑by‑meeting basis,” guided by evolving growth and inflation dynamics. He added that the RBI is not making any advance assessments on future liquidity requirements at this point.
The RBI Governor said the central bank has already put in place a regulatory framework to curb excessive proprietary trading by brokers. He noted that the RBI has invited comments and suggestions from stakeholders on the proposed rules, but clarified that, at this stage, the regulator is not considering any changes to the framework. The approach, he indicated, remains firmly aligned with maintaining market integrity while allowing ample time for industry feedback.
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