Security inseparable from industrial policy
India's economy is vulnerable to global shocks due to its dependence on imports, particularly LPG and oil, and its limited export capabilities. The country's growth forecasts have been revised downward, and it needs to focus on building strategic resilience and export-oriented industrial policy.
India's industrial policy is now closely tied to national security due to rising global tensions. The country's LPG imports are vulnerable to disruptions in the Strait of Hormuz, and oil price shocks can significantly impact its economy. The Economic Survey's concept of 'strategic resilience' emphasizes domestic production of essential goods. However, India's real vulnerability lies in its limited export capabilities, which make it difficult to absorb external shocks. Countries like South Korea, with strong export-oriented industrial policies, are better insulated from such volatility. India needs to focus on building its manufacturing exports and becoming 'strategically indispensable' to global supply chains to achieve a more resilient balance of payments and greater geopolitical leverage.
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