Strengthening India’s Economic Security: Time to Broaden the Conversation

Recent years have witnessed a series of severe shocks to the global economy that differ in origin but are remarkably similar in impact. The pandemic disrupted global production and mobility at an unprecedented scale. The Russia Ukraine conflict exposed vulnerabilities in global energy, food, and fertiliser systems. Climate related events are increasingly affecting infrastructure and agriculture worldwide. Trade actions by major economies have introduced new uncertainties, while concentration risks in critical minerals and advanced technologies have emerged as pressing strategic concerns. Even recent disruptions in widely used digital platforms have highlighted the deep fragility of heavily interconnected economic systems.  

The ongoing conflict in West Asia has once again brought to the forefront an issue that requires far more sustained attention in India’s policy discourse: economic security. For a country of India’s immense size, ambitions, and growing global integration, economic security cannot be viewed narrowly as a simple matter of growth performance, trade balances, or fiscal stability. Rather, it must be comprehensively understood as the capacity of the nation to sustain development, protect its citizens from external shocks, preserve strategic autonomy, and ensure that economic progress continues seamlessly even in a highly uncertain geopolitical environment.  

Recent disruptions across energy markets, shipping routes, supply chains, and financial flows conclusively demonstrate that the world economy has entered a phase where economic policy and national security are deeply intertwined. In such a volatile world, resilience becomes just as important as efficiency. Shocks now transmit rapidly across borders and sectors, affecting growth, inflation, employment, and financial stability almost simultaneously. For a rapidly developing country deeply integrated with the global economy, this raises a fundamental question: how should economic security be understood today, and how should policy be shaped to strengthen it?  

Nearly two decades ago, following the global financial crisis, the CII took an early initiative to bring this vital subject into the policy discussion, correctly arguing that economic security is inseparable from national security. However, the world of 2026 is vastly different and more complex than that of 2008. Globalisation has deepened but has also become remarkably more fragile. Supply chains are longer and heavily concentrated. Energy markets are significantly more volatile, and technology has fully transitioned into a strategic domain. In this environment, India must define economic security in a wider, more contemporary sense and develop a clear framework to guide policy thinking in the critical years ahead.  

Defining Economic Security in the Present Context  

Economic security today must be understood as the capacity of a nation to sustain high growth while maintaining absolute resilience against external shocks, deliberately avoiding excessive dependence on any single source, preserving financial stability, and ensuring that domestic development remains inclusive, sustainable, and strategically autonomous.  

For practical policy purposes, economic security can be viewed through five interrelated pillars. Weakness in any single one can expose the entire system to massive risk. A durable approach to economic policy requires actively strengthening all five pillars simultaneously.  

Pillar I: Resource Security: The Foundation of Stability  

Resource security is the most basic and critical layer of economic security. It includes reliable access to energy, food, water, fertilisers, and critical minerals, which are the essential inputs for daily life and industry. For a rapidly growing economy such as India, some degree of import dependence is unavoidable, particularly in crude oil and natural gas. Sustained growth requires reliable fuel supplies, and import dependence makes the economy sensitive to global price movements. Over the past decade, India has strengthened its resilience through the aggressive diversification of import sources, expansion of strategic petroleum reserves, and rapid growth in renewable energy capacity. Moving forward, maintaining adequate food buffer stocks and securing access to strategic materials like lithium, rare earths, and copper are vital for our manufacturing capabilities and energy transition. Resource security must fundamentally be treated as a long-term strategic priority. A clearly articulated timeframe and methodology by which this will be achieved is a necessary requirement even though implementation will be challenging.  The Pillar V discussed later is an essential ingredient to make this happen.  

Pillar II: Supply Chain and Technological Security: Reducing Strategic Dependence  

Modern industry relies heavily on complex global supply chains, where geographical concentration creates severe vulnerabilities even for the largest economies. Disruptions in shipping routes or technology access can stall entire sectors within mere weeks. Recognising this shifting global reality early on, the Honourable Prime Minister and the government took a highly visionary step by launching the Atmanirbhar Bharat movement. This timely and commendable initiative to build a self-reliant India has laid a truly robust foundation for our long-term economic security. By aggressively promoting domestic manufacturing in critical sectors like electronics, semiconductors, defence equipment, pharmaceuticals, and renewable energy components, the government has pre-emptively addressed massive supply chain risks. These proactive efforts should be seen not just as standard industrial policy, but as the very core of a broader strategy for national resilience.  

Building upon the strong momentum of Atmanirbhar Bharat, technological capability has now become a defining element of national strength. Access to advanced digital infrastructure, artificial intelligence, and secure data networks directly determines both economic competitiveness and strategic autonomy. True supply chain security therefore requires continuous domestic capacity building and sustained investment in local innovation, ensuring India can sustain production even when global conditions fracture.  

Pillar III: Financial Security: Macroeconomic Strength as a Strategic Buffer  

Financial stability is an essential pillar of economic security. Countries with weak macroeconomic fundamentals are far more vulnerable to external shocks, as sudden disruptions in capital flows or commodity prices can quickly snowball into domestic crises. Maintaining rigorous macroeconomic discipline is therefore not only sound policy but a critical matter of national resilience. India’s exceptionally prudent macroeconomic management over the past decade has successfully created an important buffer. Large foreign exchange reserves, strict banking regulation, credible monetary policy, and gradual fiscal consolidation have enabled the country to maintain stability during intense global turbulence. Financial security also requires well capitalised banks and deep capital markets to sustain continuous investment when external conditions become uncertain.  

Pillar IV: Institutional Strength and Domestic Resilience: The Internal Capacity to Withstand Shocks  

External preparedness alone is inherently insufficient. Economic security also heavily depends on the internal strength of the domestic economy, including the quality of infrastructure, the effectiveness of institutions, and the inclusiveness of growth. India has made truly significant progress in expanding infrastructure, digital connectivity, and financial inclusion. The massive expansion of highways, digital payment systems, and banking access has drastically increased economic efficiency. Furthermore, continuous reforms in taxation and governance have vastly improved the ability of businesses to operate effectively even in difficult global conditions. Equally important are a highly skilled workforce and strong health systems, which ensure development benefits are shared, thereby reducing vulnerability during periods of major disruption.  

Pillar V: External and Diplomatic Security: Partnerships as a Source of Resilience  

In an interconnected world, absolute economic security cannot be achieved through domestic policy alone. Strong, highly diversified international partnerships are absolutely essential. Trade agreements, investment relationships, and strategic technological cooperation actively help reduce dependence on any single source and provide vital support during global crises. India’s continuously expanding engagement with major global economies and multilateral institutions has significantly enhanced our overall ability to navigate complex uncertainties. Diplomatic engagement plays a deeply critical role in ensuring stable access to vital resources and maintaining open global trade routes.  

The Importance of Strategic Buffers and a National Framework  

One key lesson from recent global crises is the absolute necessity of strategic buffers. True economic security requires the physical and financial ability to withstand temporary global disruptions without suffering long term domestic damage. Efficiency alone simply cannot guide national policy in a world where profound disruptions are frequent.  

Furthermore, economic security cannot be ensured by government policy alone. Private industry has a central role in building resilient domestic supply chains, heavily investing in local capability, and adopting long term risk management strategies. It is in this exact context that the CII has initiated a structured national dialogue on the future of India’s economy through the IndiaEdge platform, with economic security positioned as a central theme.  

India stands at a decisive moment in its economic journey. We are among the fastest growing major economies and an increasingly influential global voice. Yet, recent international events heavily remind us that sheer growth alone does not guarantee stability. By building upon the highly successful self-reliant foundation of Atmanirbhar Bharat, comprehensively strengthening resource security, and expanding strategic international partnerships, India can ensure that its historic rise remains not only rapid but profoundly secure. This must undoubtedly become one of the primary guiding principles of our economic policy in the years ahead.  

Note: This article has been authored by R Dinesh, Past President & Chairman – Economic Affairs Council, CII, and Executive Chairman, TVS Supply Chain Solutions Limited. It was first published in the March 2026 issue of CII ARTHA (Issue 10)