Union Finance Minister and Minister of Corporate Affairs Nirmala Sitharaman and Managing Director and CEO of BSE Sundararaman Ramamurthy during BSE’s 150th-anniversary celebration 

Union Finance Minister and Minister of Corporate Affairs Nirmala Sitharaman said global trade recalibration efforts and tariff wars present challenges but are “not worrisome” while addressing the Bombay Stock Exchange’s 150th-anniversary celebration on Thursday.

“The recalibration efforts on trade are very challenging. I wouldn’t say they’re worrisome — they are, to an extent — but more importantly, they’re going to be very challenging,” Sitharaman said at the event where she launched commemorative silver coins and the BSE India 150 index.

The Finance Minister noted that protectionist policies could disrupt global supply chains, increase production costs, and create uncertainty in cross-border investment decisions, with ripple effects on financial markets worldwide, including India’s.

Sitharaman emphasised that while India’s rise from being the 10th largest economy in 2014 to the fifth largest today represents significant progress, maintaining future growth would require careful planning.

“Soon we will be the third largest (economy). I look forward to that day India will reach the high-water mark, purely on the back of the efforts of our own institutions,” she said

“Reaching third position itself is of immense pride but to sustain ourselves there will require a lot more planning and taking ourselves forward,” she added.

Despite global headwinds, Sitharaman highlighted the resilience of India’s financial markets, citing that foreign portfolio investors channelled over ₹17,500 crore into financial stocks in the second half of March 2025. She also noted the growing maturity of India’s capital markets, with domestic institutional investors recording total inflows of ₹6.1 lakh crore in the last financial year, far outpacing the ₹1.3 lakh crore net outflows from foreign portfolio investors.

“This transition of DIIs from a supportive to a dominant force underlines the growing maturity and depth of India’s capital market,” she said.

The Finance Minister praised retail investors, particularly youth and women, for their increasing participation in equity markets. “The median age of Indian investors is 32 years with over 40 per cent of them under the age of 30 only and one in four investors today is a woman,” she noted.

However, in May 2024, she had cautioned about the “unchecked explosion” in high-risk futures and options trading by retail investors, warning it could negatively impact household finances.

“Any unchecked explosion in retail trading in F&O can create future challenges, not just for the markets but for investor sentiment and also for household finances,” she had said at a previous BSE event, addressing concerns after a SEBI study revealed nine out of ten retail investors suffer losses in equity derivatives.

At Thursday’s event, Sitharaman credited BSE with modernising its operations through technology adoption, noting the exchange’s capacity to process 1,500 crore orders per day and 14 lakh orders per second, with average transaction completion times under 200 microseconds.

FM’s vision

She outlined her vision for India’s capital markets as “deep and diverse, globally integrated, digitally secure, and sustainable and inclusive,” emphasising the need for continuous innovation in financial products that appeal to all strata of society.

“To truly democratise investments, stock exchanges must continually innovate and design products that are accessible, understandable and aligned with the risk appetite and saving behaviour of our citizens,” she said.

Sitharaman stressed the importance of investor education programs in regional languages across urban and rural areas, particularly targeting students, senior citizens, women, rural investors, and first-time traders, saying that “investor awareness becomes very vital” in a market with increasing retail participation.

Published on April 17, 2025