NEW DELHI: India’s economic resilience rests on domestic capabilities, diversification and openness, Dr P K Mishra, Principal Secretary to Prime Minister Narendra Modi, said while speaking at the 5th Kautilya Economic Conclave on Saturday.
Delivering the keynote address at the plenary session, Mishra said the nature of economic risk had changed significantly, with the world increasingly confronting uncertainty that cannot be reliably assigned probabilities.
“The world is confronting not merely risk, but uncertainty,” he said, adding that “geography has returned to the centre of the economic table” amid growing global uncertainty.
“The pandemic, geopolitical conflicts, supply-chain disruptions, trade restrictions and rapid technological changes have brought this distinction into sharp focus”, he remarked, noting that geography, which technology was once thought to have made less relevant, has returned to the centre of economic decision-making.
“Disruptions to shipping routes can affect energy prices thousands of kilometres away, while the concentration of critical minerals and their processing creates new vulnerabilities. The clean energy transition also brings new forms of strategic dependence that need to be addressed”, he added.
He said uncertainty was changing economic behaviour, with firms diversifying suppliers, maintaining inventories and developing alternative production capacity, while governments strengthen reserves, fiscal buffers and strategic capabilities.
“Resilience is not free,” he said, adding that the key economic question was whether the premium paid for resilience was justified by the potential cost of the disruption being avoided.
Mishra said the emerging global response did not represent a retreat from globalisation but a reassessment of how it should be organised in a world of greater uncertainty. Countries are seeking to combine domestic capabilities with diversified international partnerships, strategic reserves, alternative supply chains and deeper economic cooperation, he said.
Speaking about India’s experience, Mishra said resilience could not mean insulation from the world.
“It has to mean the ability to remain open to the world without becoming excessively vulnerable to it”, he added.
He highlighted energy security, critical minerals, strategic industrial capabilities and diversification of external economic relationships as important elements of India’s response. He also stressed that resilience must be accompanied by productivity and competitiveness.
Mishra said building domestic capability should not mean replacing imports at any cost, but creating capabilities that are competitive, scalable and ultimately capable of serving global markets.
He also underlined the importance of macroeconomic resilience, noting that fiscal space, adequate foreign exchange reserves, a sound financial system and credible institutions provide countries with the capacity to respond to external shocks.
He said security and sustainability were increasingly converging, with energy, food, technology and environmental security becoming closely interconnected.
He emphasised that resilience was not a choice between self-sufficiency and globalisation.
“The more rational approach lies between the two- domestic capability where vulnerability is strategic; diversification where concentration is risky; and openness wherever global integration strengthens productivity and competitiveness”, he asserted.
Referring to the larger meaning of Atmanirbharta, he recalled Prime Minister Narendra Modi’s observation that it is not about being closed to the world, but about being self-sustaining and self-generating.
