India's Call for Global South Action on Economic Challenges

New Delhi, Jul 4 (PTI) Finance Minister Nirmala Sitharaman on Friday emphasised the need for decisive collective action by the Global South to deal with multiple uncertainties arising out of fiscal constraints in several economies and evolving geopolitical dynamics.

She was speaking at the Annual Meeting of Board Governors of the New Development Bank (NDB) at Rio De Janeiro, Brazil on 'Driving Development: Fostering Innovation, Cooperation, and Impact through a Multilateral Development Bank for the Global South'.

Sitharaman said the meeting is taking place at a defining moment for the Global South, as the world grapples with multiple uncertainties arising from fiscal constraints in several economies, climate transition issues and evolving geopolitical dynamics.

"In response to these challenges, our collective action must be decisive, inclusive, and forward-looking," she said.

The New Development Bank (NDB) has been established by BRICS nations.

She noted that MDBs play a pivotal role in complementing our efforts in tackling these uncertainties.

"MDBs have a distinctive comparative advantage in their ability to catalyse both public and private investments by offering a package of technical expertise, concessional financing, and effective risk mitigation tools thereby widening our policy options," she said.

In this context, Sitharaman added that NDB has emerged as a key partner -- channelising development finance, supporting resilient infrastructure, and fostering meaningful cooperation across the Global South through a pragmatic and responsive approach.

"India reaffirms its steadfast commitment to inclusive, sustainable, and innovation-led development of the global south," she said.

Sitharaman said India's efforts led to the landmark inclusion of the African Union as a permanent member of the G20 to ensure that the Global South plays a pivotal role in discussions about issues impacting them.

She told the gathering that the Indian economy has demonstrated remarkable growth and resilience in the post-pandemic era.

Strong focus on macroeconomic stability, targeted efforts to promote digitalisation and inclusive policy design have been instrumental in achieving this, despite facing multiple domestic and external challenges.

"India is poised to remain one of the fastest growing economies globally in the coming years," she said.

She further said over the past decade, NDB has emerged as a credible institution with its client focus, agile response and financing several key infrastructure projects.

As the Bank enters its next phase of growth, it must focus on strategic priorities, she said.

"Mobilising private capital is key to sustaining growth given the limited fiscal space and competing demands for public capital expenditure. NDB should play a catalytic role in unlocking private sector capital," she said.

Special focus must be placed on tailored support for Small and Medium Enterprises, especially women-led enterprises, to ensure inclusive participation, economic development and promote gender equity, Sitharaman added.

She said that NDB has shown that a Global South-led institution can deliver development solutions that are timely, trusted, and context-specific.

The Bank should foster cross-country partnerships to promote knowledge exchange, policy innovation, and technical cooperation, Sitharaman said.

"India stands ready to collaborate with NDB in sharing successful models, such as our achievements in digital public infrastructure, scaling up renewable energy adoption, for broader replication," she said, adding that robust governance and transparent institutional mechanisms are vital for enhancing the credibility and effectiveness of the NDB.

Continued focus on accountability, responsiveness, and stakeholder trust must remain a priority to ensure the Bank's long-term sustainability, she said while assuring India's continued cooperation with NDB, the member countries, and the stakeholders in this journey.