India's economic resilience should not mean insulating the country from global markets, Principal Secretary to the Prime Minister, PK Mishra said on Saturday, stressing the need to balance domestic capabilities with diversified international partnerships and continued openness.
Speaking at the plenary session titled “A World Priced for Risk” at the 5th Kautilya Economic Conclave in New Delhi, Mishra said countries were reassessing how globalisation should work in an era of greater uncertainty, supply-chain disruptions, geopolitical conflicts and technological change.
The 5th Kautilya Economic Conclave is being held from October 3 to 5 under the theme “Resilience in an Age of Flux”. The opening plenary focuses on energy shocks, supply-chain disruptions and the use of trade and economic access as strategic tools.
India’s resilience cannot mean isolation
Mishra said resilience should allow India to remain connected to the world without becoming excessively dependent on it.
“Resilience cannot be insulation from the world. It has to mean the ability to remain open to the world without becoming excessively vulnerable to it,” he said.
He identified energy security, critical minerals, strategic industrial capabilities and diversification of India's external economic relationships as key components of that approach.
Mishra said domestic production could sometimes cost more than importing goods from the cheapest global source, with the value of domestic capacity becoming apparent when international disruptions occur. He stressed that building domestic capability should therefore focus on competitiveness and scalability rather than replacing imports at any cost.
He pointed to developments in electronics, semiconductors, pharmaceuticals and other strategic sectors as examples of India's efforts to develop capabilities that can eventually compete in global markets.
Geography returns as a source of economic risk
Mishra said the nature of economic risk had changed substantially. The world is now dealing not only with risks that can be calculated and assigned probabilities, but also with uncertainty for which reliable probabilities cannot easily be established.
The pandemic, geopolitical conflicts, supply-chain disruptions, trade restrictions and rapid technological changes have brought that distinction into sharper focus.
He said geography, which technology had once been expected to make less important, had returned to the centre of economic decision-making.
A disruption along a major shipping route can affect energy prices thousands of kilometres away, while supply chains that appear efficient under normal circumstances can become vulnerable when a single supplier or geographical location becomes unavailable.
The concentration of critical-mineral extraction, processing and refining creates similar vulnerabilities. Lithium, cobalt and rare earths are essential for batteries, electronics, renewable energy and advanced manufacturing, but their supply chains remain geographically concentrated.
The clean energy transition itself, Mishra said, is creating new forms of strategic dependence that need to be addressed.
Resilience comes at a price
Greater uncertainty is already changing the behaviour of companies and governments, Mishra said.
Businesses are diversifying suppliers, holding larger inventories and developing alternative production capacity. Governments, meanwhile, are strengthening reserves, fiscal buffers and strategic capabilities.
But such preparedness has an economic cost.
“Resilience is not free,” Mishra said, arguing that the central economic question is whether the premium paid for resilience is justified by the potential cost of the disruption being avoided.
He said the global response should not be interpreted as a retreat from globalisation. Instead, countries are seeking to combine domestic capabilities with diversified international partnerships, strategic reserves, alternative supply chains and deeper economic cooperation.
Trade measures can become economic weapons
Mishra also warned that export restrictions, sanctions and tariffs can become instruments of economic policy and, at times, be weaponised.
Wars and disruptions around major maritime routes can affect energy and food markets, while geographical choke points can become sources of economic vulnerability.
For India, the disruption around the Strait of Hormuz has been a particular reminder of how geography can translate into economic risk because the country is a major energy importer.
Mishra said India has responded by maintaining substantial stocks, increasing domestic production where possible, diversifying procurement and ensuring that alternative suppliers and supply routes are available.
India has also developed international partnerships on critical minerals with countries including the United States, France, Germany and the Netherlands, covering areas such as exploration, processing, recycling, technology and supply-chain resilience.
Macroeconomic strength provides a buffer
Mishra said macroeconomic resilience was another important but less visible component of preparedness.
A country facing an external shock needs room to respond, he said, and that room comes from fiscal space, adequate foreign exchange reserves, a sound financial system and credible institutions.
He noted that India has continued with fiscal consolidation while maintaining public investment.
He also linked economic resilience with broader questions of security and sustainability. Energy, food, technology and environmental security are increasingly interconnected, making it necessary to consider them together rather than as separate areas of policy.
Finding the balance between openness and self-reliance
Mishra said resilience should not be viewed as a choice between complete self-sufficiency and unrestricted globalisation.
“The more rational approach lies between the two,” he said, arguing for domestic capability where vulnerability is strategic, diversification where concentration creates risks, and openness where global integration improves productivity and competitiveness.
He also referred to Prime Minister Narendra Modi's interpretation of Atmanirbharta, saying it is not about closing India off from the world but about becoming self-sustaining and self-generating.
Mishra said he expected the global economy to increasingly reward countries that can remain steady without becoming closed, cautious without becoming fearful and ambitious without being naive. India, he said, intends to be such a country.