Union Finance Minister Nirmala Sitharaman on Tuesday said the Reserve Bank of India (RBI) would continue to take steps to prevent excessive volatility in the rupee, attributing much of the currency's recent weakness to global factors.
Speaking at the Bloomberg New Economy Forum 2026, Sitharaman acknowledged the extent of the rupee's depreciation over the past year. “Rupee depreciation over the past year has been significant and most of it was due to global challenges,” she said.
She also highlighted India's strong macroeconomic fundamentals, saying they should reassure investors about the country's commitment to fiscal discipline and economic stability.
RBI focused on managing rupee volatility
Sitharaman said the RBI's focus was on limiting excessive fluctuations in the rupee rather than keeping the currency at a particular level.
Referring to the rupee's depreciation over the past 18 to 24 months, she said external pressures had played a major role. She also pointed to India's strong foreign exchange reserves and economic fundamentals as factors supporting the country's stability.
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She said the government would continue to follow a disciplined fiscal approach while protecting spending on key areas such as welfare, education and healthcare.
No commitment on LTCG tax, STT changes
Sitharaman did not indicate whether the government was considering changes to long-term capital gains (LTCG) tax or the securities transaction tax (STT), saying it was too early to comment ahead of the Union Budget.
She said investors, both in India and overseas, had been discussing the taxation of capital gains and different asset classes. The government was open to hearing their concerns and suggestions, she added.
"We are very close to the Budget and the preparation for the Budget has started, and it may not be the best time for me to say what I will or what I will not consider," she said.
India taking practical approach to chip manufacturing
On India's semiconductor strategy, Sitharaman said the country was pursuing opportunities in both advanced chips and semiconductors used in everyday products. She rejected concerns that India's ambitions in the sector were unrealistic.
She said demand would remain strong for chips used in refrigerators, automobiles, industrial machinery and Internet of Things (IoT) devices.
India's approach was to develop capabilities in these areas while also working towards more advanced semiconductor technologies, she added.
AI growth to create demand for power infrastructure
Sitharaman said the rapid expansion of artificial intelligence (AI) and data centres would increase the need for electricity generation and reliable power infrastructure.
She stressed the importance of developing sustainable green energy sources to meet the growing power requirements of data centres, semiconductor manufacturing and other AI-related infrastructure.
Investment in renewable energy and electricity transmission networks would be essential to support this expansion, she added.
Infrastructure pipeline offers investment opportunities
Highlighting India's infrastructure plans, Sitharaman said the National Infrastructure Pipeline had expanded to more than $4.5 trillion, creating investment opportunities across sectors and regions. She also underlined the role of the National Bank for Financing Infrastructure and Development (NaBFID) and the National Investment and Infrastructure Fund (NIIF) in attracting long-term capital for infrastructure projects.
The finance minister said domestic private investment was gaining pace, with capital being directed towards sectors such as renewable energy, semiconductors, pharmaceuticals and aircraft maintenance, repair and overhaul (MRO) facilities.
She added that India's civil aviation sector was growing at around 16 per cent, opening up further investment opportunities in aviation infrastructure and related services.