"India's growth story is based on domestic demand. It is not based on the export market entirely...we can continue to keep our domestic demand-driven growth," Nath said in an interview to BBCs Hard Talk.
Only 20 per cent of India's domestic production that is around $200 billion is exported.
The economy has shown signs of weakness in the current fiscal year over 9 per cent in the last three financial years in a row. The Reserve Bank of India has lowered the growth projection rate to 7 per cent for 2008-09 due to global recession.
"We cannot insulate or isolate ourselves from it (global downturn) but we can continue to keep our domestic demand," he said.
The Central Government has approved $4 billion for infrastructure projects which could take off in the next few months.
"That is creating domestic demand...and that is what is going to sustain (us) through. We are not going to get hit as (badly) as other countries," Nath said.
He also mentioned that the stimulus package by the government has shown positive signs with different industry segments picking up.
"I had meetings with industry. They said in the last 15 days they have seen a pick-up...they are seeing things brighten up...of course they want more," he added.
Nath said government expenditure is bound to increase, leaving a wide fiscal gap. "Our fiscal deficit is going to increase but I think it will be manageable," he said.
Asked about the anti-outsourcing feelings in the US, Nath said, "The heart of globalisation lies in global competitiveness." He expected the US manufacturing sector to realise the virtues of outsourcing.
"Today if GE is outsourcing to India, it is because India has those skills, it has the technology to serve and they can do it in a competitive manner. That is how GE can produce a competitive product," he said.
Nath expressed hopes that businesses would "prevail upon the US administration to look at how competitive it (outsourcing) can be in a global market".
OneIndia News (With inputs from Agencies)