Finance Minister Nirmala Sitharaman has called for strategic autonomy in critical inputs, arguing that India must prepare for a world where uncertainty is a standing condition of the global economy. Her call resonates with India’s recent struggles to ensure energy security and its continuing difficulties in securing critical minerals essential for electronics, automobiles and the semiconductor ecosystem. The US and China have, in different ways, complicated India’s efforts to secure these strategic inputs. The US has even threatened sanctions over India’s purchases of Iranian oil and passed legislation with a provision to impose 100 percent tariffs on countries such as India for purchasing Russian crude.
Washington’s stance is particularly difficult to reconcile with the uncertainty created by its own policies in the global energy market. The continuing US-Iran confrontation has added to concerns over crude availability and prices, with consequences extending far beyond the countries directly involved. China, meanwhile, has also made matters worse by imposing restrictions on exports of critical minerals and tightening access for Indian engineers and skilled workers seeking training in the country. Such measures inevitably push countries like India to look inward and can foster distrust of the free-trade and free-market system.
Yet strategic autonomy and self-reliance cannot mean economic isolation. India will need to cultivate more dependable trade and business partners while building domestic capabilities in manufacturing, semiconductors and defence. The objective should be to reduce vulnerability, not eliminate interdependence. A key foundation of strategic autonomy is macroeconomic stability. India has done well to remain on a fiscally prudent path despite repeated global shocks. This gives the country greater policy space to respond to disruptions and, importantly, strengthens its hand while negotiating trade and investment agreements with major partners, whether the UK or the European Union.
At the same time, India must focus on developing critical capabilities at home. This requires a much bigger push towards research and development and a stronger pipeline of high-quality STEM graduates. If India risks missing the current AI investment wave, one reason is that it has yet to build the technological capabilities and large-scale AI models needed to compete at the frontier. Strategic autonomy, therefore, cannot be reduced to building a domestic semiconductor or defence manufacturing ecosystem, or simply fortifying strategic oil reserves. It must ultimately be about building an economy capable of staying ahead of the technology curve.