Finance Minister Nirmala Sitharaman has warned that the ongoing US-Iran war poses significant risks to the global economic system, describing it as a "systemic tremor". The war has escalated beyond a regional security concern and now threatens critical global energy supply routes and reshapes geopolitical alignments.
The global economy has entered a phase of permanent volatility, moving away from isolated shocks, Sitharaman noted. The current year is even more challenging as we move from a landscape of 'shocks' to one of 'permanent volatility', she added.
The finance minister pointed to a series of disruptions that have reshaped the global economy in recent years, including the COVID-19 pandemic, the Russia-Ukraine war, rising tensions in the Middle East, and trade uncertainties linked to policies under former US President Donald Trump.
India's relatively strong macroeconomic fundamentals have been highlighted by Sitharaman, with a general government debt-to-GDP ratio of about 81% and a low external debt-to-GDP ratio of 19.1% as of September 2025.
The conflict continues to intensify with no immediate signs of de-escalation, with the US and Israel carrying out fresh strikes on Iran and Iran retaliating with missile attacks targeting Israel and Gulf countries.
The war has also triggered international concern, with the United Nations Security Council set to vote on a revised resolution aimed at reopening the Strait of Hormuz, a critical route through which nearly one-fifth of global oil supply passes.
