Guns are ready to fire everywhere and anxiety is seeping into the very bones of governments globally. Yet, the latest Economic Survey—with a peculiar synthesis of chaos and optimism—yearns for bigger and brighter things for Asia's third-largest economy.
And the Survey's big ta-da reveal is not just FY27's real GDP growth estimate of 6.8%-7.2%, but the upward revision in India's potential growth to 7% per annum from 6.5%. If manufacturing and export competitiveness improve and the government continues on the reforms path, potential growth may even touch 7.5%-8% per annum.
Interestingly, this is on the back of domestic resilience and notwithstanding the geopolitical environment being what it is.
For instance, as though the ongoing wars aren't enough, regional conflicts between Iran and Israel, the crisis in Venezuela, fresh fears over Cuba, Greenland and so on are forcing economies to walk on a carpet of needles. Adding to the unending woes, Western nations are smelling the coffee and insist that globalisation and offshoring failed them badly. They are embracing protectionism, favouring domestic industries and workers, while markets keep praying the world stops spinning.
In short, the situation is somewhat similar to singer Pat McDonald's grim and ironic take on the imminent global destruction—The future's so bright, I gotta wear shades!
But the Survey's architect, Chief Economic Adviser V Anantha Nageswaran, assures us that the sky isn't falling. So his advice to Indian policymakers is simple: Choose wisely; everybody isn't your buddy. Lean on your pals and build domestic resilience and strategic indispensability. The idea is to shift the question from can we keep functioning if the world breaks down to can the world keep functioning if we break down? The very thought gladdens the spirit, and we may or may not achieve that supremacy. But like in the field of Dharma, intentions matter as much, if not more, than the act itself.
Tabled in the Parliament on Thursday, the Survey is pretty straightforward in its aspirations: build domestic capacities, reshape export, trade and supply-chain strategies to make India irreplaceable in key global value chains. But how do we get there? The Survey's solution is stunningly persuasive—make Make in India a goal, and indigenisation a priority.
In fact, Nageswaran is a long-time advocate of the Swadeshi ecosystem and wants to shift the world to buying Indian without batting an eyelid. Swadeshi as a policy instrument is all the more crucial, as he cautions that trade is no longer reciprocal, markets no longer neutral and supply chains are instruments of state power. Further, he warned that emerging market economies may face resource crunches, particularly base metals, crude oil, pharma ingredients and so on. So he urged the government to maintain buffers, most of which will include imports.
This is where reliable trade partnerships come in handy. India's raw determination to forge trade pacts—be it with the UK, EU, Oman and others—proves both the narrative and aesthetic peak.
For instance, the India-EU free trade deal unlocks access to a $27 trillion market accounting for over 25% of global GDP. More than the deal-making us better, it's making fellow trade partners bitter, particularly a miffed America, which labelled India as a 'dead economy', while slapping 50% tariffs.
As for a deal with the US—touted as another historic pact—even after months of negotiations, it never stands still, but isn't finding its stride either.
Besides partnerships, Nageswaran has been championing Aatmanirbharta, but for that we need an urgent burial of the colonial-era bureaucracy, de-regulation and the State and inculcation of an entrepreneurial mindset. Bringing a new generational perspective to the question of colonial-era mindset, Nageswaran emphasised that Indian bureaucracy must shift to an entrepreneurial mindset, ever-ready for risk-taking, accepting failures and putting outcomes ahead of processes. It's not that we haven't done it. According to him, India's success story in the software sector didn't happen on its own, but because bureaucracy broke many barriers.
"We have to evolve...from import substitution and strategic resilience to strategic indispensability to withstand external shocks and pursue diversification," he explained, adding that all industrial countries like Korea, Taiwan, and Japan have supported domestic industry to measure up to global production standards.
According to Nageswaran, building domestic resilience is the only way to deal with the destruction devil. The global economic uncertainty has tripled in 2025, and it's likely to get worse. We are here at this delicate juncture largely because of wrong policy priorities, including easy money and ultra-cheap interest rates pursued by advanced nations for decades. Moving forward, the Survey outlined three possible scenarios that could emerge—managed disorder, sharper trade-offs to growth and supply chains, and lastly, a cascading systemic shock.
Even if we reach for the extinguisher, we can escape lightly only if we have a sound domestic economy with all three engines—agriculture, industry (led by manufacturing) and services—all firing together. Which is why the Survey's solemn title—External Sector: Playing the long game—urges us to make Make in India a goal, and indigenisation a top priority.
There's tender self-examination with previous surveys batting for FDI over relying on trade as it can arrest the growth of the trade deficit India has with China. But Nageswaran also reasoned that rising imports amid economic growth will need to be financed with exports. As an emerging market and an importer, India's external account reflects the impact of a rise in global uncertainty. Though gross FDI numbers remain respectable, net FDI flows are weaker than desired. This is partly due to profit-taking by investors. As for capital outflows, Nageswaran attributed it to valuations, lack of an AI story in India and tariff uncertainty. But if capital flows are weak, the rupee weakens in spite of stellar economic performance.
Currency depreciation, though, isn't unique to India and the Survey notes that it's an emerging market-wide phenomenon. That said, currency strength depends on industrial capacity, and so the CEA urged the government to first raise manufacturing strength.
Meanwhile, the government is about to release a new data series to measure national output, but the Survey turned available information into insight to conclude that India's growth remains stable even amid global turbulence.