Rangarajan Urges Shift to Strategic Protectionism Amid Global Conflicts and Trade Barriers

Adapting to a Fragile Global Order

The paradigm of global economic liberalisation face significant disruption as international relations fray and trade barriers rise. C. Rangarajan, former Chairman of the Economic Advisory Council to the Prime Minister and former Governor of the Reserve Bank of India, asserts that India must recalibrate its economic strategy to survive this new era of friction. During a lecture commemorating the 35th anniversary of India’s New Economic Policy, he noted that the dual pressures of physical invasions and aggressive tariff impositions demand a departure from established norms.

Prioritizing Domestic Sovereignty in Critical Sectors

Rangarajan contends that the current global instability forces a necessary breach of conventional liberalisation rules. To mitigate risks associated with supply chain vulnerabilities, he identified specific industries where India must secure independent manufacturing capabilities. These includes:

• Defense Goods: Reducing reliance on foreign military hardware in an era of active conflict.
• Semiconductor Production: Establishing local chip manufacturing to stabilize technology supplies.
• Artificial Intelligence: Accelerating the adaptation and integration of AI systems within the domestic economy.

A Pragmatic Reversal of Reform Logic

Speaking at the event hosted by the PG and Research Department of Economics at Stella Maris College, Rangarajan characterized these shifts as a reactive necessity. While the 1991 reforms focused on opening borders, the current environment of protectionism and territorial aggression requires a inward-looking buffer for essential inputs. Rangarajan, who currently chairs the Madras School of Economics, delivered these insights in a session titled '35 Years of India’s Economic Liberalisation Reforms: Reflections, Achievements and the Road Ahead' on July 29, 2026.

Source: The Hindu — Home