The Economic Survey said India must focus on building enduring national capabilities and strengthening economic sovereignty as the space for rules-based global trade continues to shrink amid growing geopolitical and economic tensions
Chief Economic Advisor V Anantha Nageswaran during the Economic Survey 2025-26 press conference on Thursday. Pic/PTI
The Economic Survey 2025-26, tabled in Parliament on Thursday, ahead of the Union Budget 2026, described US-imposed tariffs on imports from its trade partners as the most disruptive development affecting the global economy in recent times, reported the PTI.
The survey said India must focus on building enduring national capabilities and strengthening economic sovereignty as the space for rules-based global trade continues to shrink amid growing geopolitical and economic tensions.
According to the survey, the global economy has been subjected to multiple upheavals, driven by trade wars, strategic competition and protectionist policies. It noted that economic relationships are increasingly strategic and contested, making the ability to learn and adapt a crucial element of modern statecraft.
“The most disruptive amongst these disturbances was the imposition of tariffs by the USA on imports from its trade partners,” the survey stated, according to the PTI.
Rising protectionism and strategic competition
The assessment comes amid concerns over the trade, tariff and immigration policies of the Trump administration, China’s export controls on critical minerals, and growing unease in Western countries over India’s energy ties with Russia.
The survey observed that strategic competition is fuelling trade wars, while countries are competing for access to critical minerals and advanced technologies in a manner described as “reminiscent of a new colonial scramble”, as per the PTI.
Decline of rule-based trading system
The Economic Survey noted that economic interdependence, once seen as a stabilising force, is now increasingly viewed as a source of vulnerability.
It highlighted a resurgence of ultra-nationalism, often rooted in claims of cultural superiority and anti-immigrant sentiment, which is shaping political and policy decisions across regions.
“This shift is narrowing the space for multilateral cooperation and rule-based trading, hardening domestic borders and constraining labour mobility,” the survey said, adding that economic strategies are becoming increasingly inward-looking, the PTI reported.
Growing scepticism towards free trade
The survey said many countries are becoming sceptical of free trade and multilateral institutions, which are perceived to have contributed to large and uneven global trade imbalances.
It also flagged concerns over China’s Belt and Road Initiative, suggesting that Beijing is using its fiscal strength to build infrastructure abroad in order to enhance its trade and economic dominance, as per the PTI.
India’s resilience and the way forward
Against this backdrop, the survey said India’s reforms and economic performance over the past decade have helped it remain relevant, resilient and adaptable to external shocks.
However, it stressed that India must now go further by deliberately cultivating strategic indispensability.
In a fragmented global economy, the capacity to learn without dependence has become a critical strategic skill, the survey said, adding that “Swadeshi is inevitable and necessary,” reported the PTI.
End of ‘Naive Globalisation’
The survey observed that the strategic context has shifted significantly, with export controls, technology denial regimes, carbon border mechanisms and aggressive industrial policies signalling the end of what it termed “naive globalisation.”
“In such circumstances, Swadeshi becomes both a defensive and offensive policy tool,” it said, enabling continuity of production amid external shocks, the news agency reported.
The survey concluded that the key policy challenge lies in encouraging Swadeshi in a manner that strengthens economic sovereignty without undermining efficiency, innovation or global integration.
(with PTI inputs)
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