Finance Minister Nirmala Sitharaman has called for decisive collective action from the Global South to navigate the complexities of the current global economic landscape. Speaking at the Annual Meeting of the Board of Governors of the New Development Bank (NDB) in Rio de Janeiro, Brazil, Sitharaman emphasized the urgency for a united front to address the multiple uncertainties arising from fiscal constraints, climate-related challenges, and evolving geopolitical dynamics.
Sitharaman highlighted that the meeting was occurring at a critical juncture for the Global South, as nations grapple with various uncertainties. She stressed that the collective response must be decisive, inclusive, and forward-looking. She reaffirmed India's commitment to the inclusive, sustainable, and innovation-led development of the Global South.
A key point raised by Sitharaman was the persistent asymmetry in global financial flows, which she identified as a major impediment to sustainable development in the Global South. She cautioned that this imbalance continues to stifle long-term investments in vital areas such as clean energy, urban mobility, and climate-resilient infrastructure. Sitharaman urged a fundamental rethinking of the global financial architecture to better align with the development priorities of emerging and low-income economies. She argued that the current asymmetry deters long-term investment and delays critical progress, widening the gap between development potential and financial realization.
Sitharaman also acknowledged the challenge of balancing growth and sustainability, especially in democracies like India, where expanding access to housing, healthcare, education, and livelihoods remains a critical imperative. She emphasized that the real challenge is not choosing between development and sustainability but designing policies, in partnership with emerging markets and developed economies, that foster inclusive growth and strengthen sustainable development.
India is actively aligning its financial system with climate and development goals by deepening its green finance ecosystem. Sitharaman noted that India has laid a strong foundation for green finance through Sovereign Green Bonds, ESG disclosure mandates, and a proposed taxonomy for climate finance. These measures aim to build a more resilient, inclusive, and innovation-driven financial architecture that connects capital with climate imperatives.
Sitharaman underscored the crucial role of institutions like the New Development Bank (NDB) in reshaping development finance for the Global South. She pointed out that the NDB was established to bridge a clear gap in the global financial architecture, one that responds to the unique needs of developing economies. Over the past decade, the NDB has emerged as a credible institution with its client focus, agile response, and financing of key infrastructure projects. The NDB has approved over 100 projects with over USD 35 billion in financing across member countries, supporting key Indian initiatives like metro rail, renewable energy, and water management. Sitharaman stated that the NDB is not just a source of capital but a platform for shaping a more equitable and responsive global financial architecture.
Furthermore, Sitharaman highlighted India's efforts in ensuring the Global South plays a pivotal role in global discussions, citing the landmark inclusion of the African Union as a permanent member of the G20. She also noted India's remarkable economic growth and resilience in the post-pandemic era, attributing it to a strong focus on macroeconomic stability, targeted efforts to promote digitalization, and inclusive policy design, despite facing multiple domestic and external challenges.
Sitharaman also stated that in today's fast-changing world, the NDB's mandate must be renewed with a focus on greater agility, technological advancement, and efficiency.
