New Delhi: The “fortress” of the global economy has collapsed. Old rules no longer hold. Global supply chains have weakened. Many countries have had to rethink their external dependencies. India faced similar challenges but has managed to navigate them successfully. Shaktikanta Das, former Reserve Bank of India (RBI) governor and principal secretary to the prime minister, highlighted the reasons behind India’s resilience.
Speaking at the convocation ceremony of the Gokhale Institute of Politics and Economics in Pune, he said India is ready to contribute nearly a fifth of global GDP growth. He credited strong domestic demand and thoughtful economic policies for the country’s ability to withstand external shocks.
Das emphasised that India’s priority in free trade agreements with countries such as the United States is to protect the interests of its citizens while ensuring fair and balanced agreements.
Pace And Resilience
He highlighted that amid global uncertainty, India has shown remarkable pace and flexibility. In his 85th Kalele Smarak Lecture on “Indian Economy in a Changing Global Order”, he explained that the global economy is undergoing unprecedented uncertainty and structural changes. For over eight decades, globalisation and free trade frameworks dominated international commerce. Today, these systems face significant challenges.
Rapidly Changing Global Conditions
Earlier, the world was seen as a single market. Countries aimed for unified economic integration. Now, the situation has changed. Das explained that the global economy and trade systems have fragmented. Established rules are being questioned continuously, while new norms have yet to solidify.
Events like the COVID-19 pandemic and the Russia-Ukraine war have accelerated the push for self-reliance.
The former RBI governor highlighted the weaknesses in global supply chains, which have forced many nations to reconsider their external dependencies. Countries now prioritise supply chain resilience over mere cost-efficiency.
Strategic autonomy has emerged as a top priority. The rise of regional trade agreements reflects this shift toward practical and flexible partnerships.
Why India Has Withstood Crises
Das attributed India’s success to structural reforms and the ‘Atmanirbhar Bharat’ (self-reliant India) approach implemented over the past decade. Strong domestic demand combined with prudent and comprehensive economic and fiscal policies has enabled India to face global shocks effectively.
The country is now positioned to contribute nearly a fifth of global GDP growth.
Das reiterated that India’s trade priorities focus on fair and balanced agreements serving the country’s interests. Negotiations on free trade agreements with the United States and other countries are being conducted with this principle in mind. Indian economic policies are designed to withstand external shocks successfully.
He added that the structural changes in the global economy are transforming trade rules. The world is no longer a single and uniform market. COVID-19 and the Russia-Ukraine war have prompted countries to strengthen their supply chains and become more self-reliant. Nations now consider not only cost efficiency but also the reliability and robustness of their supply chains.