By Prof. S.S. SOMRA
Prof. S.S. Somra argues that India must move beyond protected self-reliance and build a competitive economy capable of navigating trade tensions, geopolitical risks and technological disruption.
Jaipur, August 15, 2026 — The development model adopted by India in the four decades following independence was anchored in government control, import substitution, centralized planning, and the ‘license-permit’ regime. While this strategy did provide momentum to the country’s stagnant economy, its limitations soon became apparent. Between 1950 and 1990, India’s average growth rate hovered around 4 percent.
The economic crisis of 1990–91 exposed the weaknesses of this model, and the subsequent economic reforms of 1991 steered India’s development journey in a new direction.
The most significant shift brought about by liberalization was the removal of unnecessary government controls on production and investment. Avenues were opened for the private sector, public sector monopolies were curtailed, and efforts were made to integrate the economy with global trade.
Consequently, the pace of economic growth accelerated, with the average GDP growth rate reaching approximately 6.5 percent between 1991 and 2025. This transformation demonstrated that competition, private investment, and global economic integration could serve as vital engines of development.
However, global circumstances are shifting once again. Protectionism is rising among major economies, trade tensions are intensifying, and the reliability of supply chains is being questioned. US tariff policies and escalating geopolitical tensions in West Asia have made it clear that excessive reliance on global trade can entail risks. In this context, the challenge for India lies in striking a balance between self-reliance and global integration. India must identify strategic sectors where enhancing domestic production capacity serves the national interest.
Ensuring strategic reserves of critical goods, establishing reliable supply chains, and securing the availability of essential raw materials must now become integral components of economic policy.
Yet, rather than rendering domestic industry inefficient through protectionism, the focus must be on preparing it for global competition. The ‘Make in India’ initiative should signify not merely production for India, but competitive production for the global market.
Energy security will be a crucial pillar of this new strategy. India’s reliance on imports, such as crude oil, can impact the economy during global crises; therefore, increasing investment in solar, wind, nuclear, and other alternative energy sources is essential.
Diversified energy sources will not only shield India from economic shocks but also make growth more sustainable in the long run. In this regard, the Central Government’s approval of the ₹84,084 crore “Samudra Manthan” National Offshore Exploration Scheme and the ₹5,070 crore Pradhan Mantri Surya Sarovar Yojana could prove to be significant and visionary steps towards ensuring energy security.
Similarly, shying away from artificial intelligence (AI) and new technologies is not an option. While AI may alter the nature of employment and put pressure on traditional jobs in certain sectors, retreating from technological change would weaken India’s competitiveness.
The need of the hour is to align policies regarding education, skill development, and social security with the new technology-driven economy. Amidst shifts in the global trade order, India must also adopt a balanced approach towards free trade agreements (FTAs).
While FTAs with nations like the UK and Australia—along with ongoing negotiations with other countries—offer opportunities, each agreement must be evaluated in the context of Indian industry, farmers, employment, and long-term strategic interests. Merely increasing the number of agreements is insufficient; their quality and outcomes are far more important.
The top priority should be to enhance India’s productivity and competitiveness. India can draw valuable lessons from the way countries like China and Vietnam have established themselves in manufacturing, exports, and global supply chains. India needs to reduce production costs through more efficient capital utilization, improved infrastructure, a skilled workforce, and a business-friendly environment. This requires substantial investment in both physical and social infrastructure, alongside structural reforms in factor markets.
Furthermore, knowledge and innovation must be placed at the core of the growth strategy. In an era where globalization is waning, the importance of technological self-reliance and innovation becomes even more critical. Collaboration between R&D, universities, startups, and industry must be strengthened.
India possesses both talent and a vast market; the need is to harness these into the power of innovation.
The goal of a developed India by 2047 will not be achieved through rapid GDP growth alone. It will require a more productive economy, competitive industries, enhanced human capital, robust infrastructure, and technological prowess.
Global circumstances are compelling India to consider self-reliance, yet self-reliance does not mean isolating itself from the world. The ideal scenario would be a global order characterized by rule-based, fair, and free trade.
However, until such a system is fully restored, India must pursue the next best alternative: strengthening regional trade agreements, developing domestic capabilities in strategic sectors, and continuously enhancing productivity and competitiveness.
Therefore, the guiding principle of India’s new development strategy should be ‘competitive self-reliance’ rather than ‘protected self-reliance.’ India must engage with the world while remaining prepared for the risks of a changing global landscape. This very balance can serve as the strongest foundation for a developed India by 2047.
(This is an opinion piece. Views expressed are the author’s own.)
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