India Needs to Become Strategically Indispensable: Economic Survey

Becoming swadeshi or self-reliant is not India’s ultimate goal; instead, the objective is to achieve strategic indispensability in global value chains, according to the Economic Survey 2025–26 tabled on Thursday in the Lok Sabha.

India needs to build domestic capacity in areas that would make it strategically resilient. Strategic resilience is about building buffers and strengths to withstand external shocks, the document said. It means investment in national strength and intelligent import substitution is the first step. This will take the country to the next stage of ‘strategic resilience’ and then to the final stage of ‘strategic indispensability’.

The document suggested that India needs to pursue its near-, medium- and long-term policy priorities of import substitution, strategic resilience and strategic indispensability simultaneously, as “there is no time to waste”.

The Survey highlighted the geopolitical and trade tensions across the world, which are leading to a segmented form of globalisation and selectively restricted access to technology, hinting at China’s export restrictions on heavy rare earth magnets and the US’ introduction of export quotas on Nvidia’s AI chips.

“(Global) trade is increasingly organised around blocs, capital flows are shaped by strategic and security considerations, access to technology is selectively restricted, and geopolitical risk premiums are embedded in economic decisions,” the Economic Survey said.

The next phase of global manufacturing will be shaped less by simple cost arbitrage and more by strategic indispensability, according to the Survey. “Future success will depend on a country’s preparedness and capacity to embed itself into GVCs as a high-tech, highly productive manufacturing hub supported by a stable policy environment.”

The comments in the Survey are in line with Prime Minister Narendra Modi’s recent calls at various forums urging domestic firms to make products of the highest quality standards at the lowest possible cost so that foreign firms are drawn to Indian products.

The Survey noted that India will attain strategic indispensability when the world moves from ‘thinking about buying Indian’ to ‘buying Indian without thinking’.

“The highest form of economic power is influence exercised without coercion, when others align with our interests because it is in their interest to do so. Strategic indispensability delivers precisely this form of power,” the document added.

India and the rest of the world are facing trade uncertainty with the US, the world’s largest economy, due to Trump tariffs. India is among the countries facing the highest import taxes imposed by Donald Trump. This has created rifts between the US and many of its allies, such as the European Union.

Leaders of different countries, during the recently concluded World Economic Forum in Davos, opposed Trump’s tariff threats. India is in talks with the US, negotiating a trade deal.