The government expects domestic industry to scale up export competitiveness in return for the policy support it provides, Chief Economic Advisor (CEA) V Anantha Nageswaran said on Thursday. At a time when global trade tensions are at a decadal high, he stressed that India must build a competitive edge in exports by producing high-quality goods.
“When we give protection to our industry from import competition, we have to link it to productivity and export performance. That is what Northeast Asia did better than any other region in the world,” the CEA said during his media briefing on the Economic Survey. He pointed out that countries such as South Korea, Taiwan, Singapore and Japan supported their domestic industries but demanded productivity gains and export performance in return.
Nageswaran said the government has taken steps to achieve “strategic indispensability” for exporters by building world-class and reliable infrastructure, ensuring long-term policy stability, strengthening talent ecosystems, and designing incentives linked to productivity and export outcomes.
“Protection cannot be in perpetuity, and it has to be in return for productivity and export performance,” he added.
The Economic Survey cautioned that permanent protection is misplaced in sectors where India is already cost-competitive, exporting at scale, or supplying critical intermediate goods. Such protection, it noted, can raise economy-wide costs and blunt competitiveness. The Survey also warned against shielding inefficient producers or entrenching incumbents, stressing that protection without productivity gains, innovation and export orientation breeds fragility rather than strength.
During April–December 2025, India’s exports totalled $634.3 billion, registering a 4.3% year-on-year increase, while imports rose 4.9% year-on-year to $730.8 billion. As a result, the trade deficit widened to $96.6 billion from $88.4 billion in the corresponding period a year earlier. Merchandise imports increased 6.3% year-on-year in FY25 to $721.2 billion, driven largely by higher demand for critical intermediate inputs and capital goods, indicating resilient domestic demand.
Commenting on rising imports, the CEA said India needs to build adequate buffers as global supply chains can be disrupted at any time, as seen in recent global shocks. “Apart from building buffers—which in many cases requires imports—we also have to recognise that as the economy grows and per capita incomes rise, imports will inevitably increase,” he said.