New Delhi, April 6 -- Trade fragmentation, along with the ongoing West Asia conflict, means that 2026 could prove more challenging, as the global economy moves from episodic "shocks" to a state of "permanent volatility," finance minister Nirmala Sitharaman said on Monday.

However, India has sufficient fiscal space to sustain its asset-creating public expenditure, while the central bank has room to cut interest rates to support growth, aided by the government's commitment to fiscal prudence, she said.

"The escalation of the Middle East conflict has evolved from a regional security concern into a systemic tremor, threatening the vital arteries of global energy and hardening the lines of a new multipolar world order," Sitharaman said at an...