The former Reserve Bank of India governor says the country must stockpile essential goods, cut its reliance on imported energy and raise productivity as trade and supply shocks become harder to dismiss.
Former Reserve Bank of India Governor C Rangarajan has called on India to rethink its growth model in light of fresh shocks to global trade and energy flows, arguing that the country needs to prepare for disruptions such as a blockade of the Strait of Hormuz and the wider fallout from a more fragmented world economy. Speaking at the 16th convocation of the ICFAI Foundation for Higher Education, Rangarajan said India should build buffers of essential commodities, especially oil, reduce reliance on imported energy and place greater emphasis on innovation and productivity, according to The Hindu BusinessLine and United News of India.
Rangarajan linked his warning to what he described as a double blow from unilateral tariff moves and conflict in the Gulf, which he said had undercut the two foundations of the global trading system: agreed tariff rules and the free movement of goods by sea. He said the country could no longer assume that such shocks would be rare or temporary, and argued that development policy must account for recurring supply disruptions as well as longer-term strategic competition. That view is consistent with government data showing India already maintains strategic crude reserves, including storage sites at Visakhapatnam, Mangaluru and Padur, with more capacity planned under Phase II.
He said “Atmanirbhar”, or self-reliance, should not be interpreted as a retreat into indiscriminate import substitution. Instead, according to The Hindu BusinessLine, he argued that Make in India must be tied to global competitiveness, with domestic production aimed not only at home demand but also at export markets. The point is important in the Indian context because the World Intellectual Property Organisation’s 2025 Global Innovation Index ranks India 38th, behind South Korea and China, which ranked fourth and tenth respectively, underscoring the gap Rangarajan wants closed through stronger research, better infrastructure and more effective use of knowledge.
The former central bank governor also urged caution on trade agreements, even as he welcomed India’s pacts with the United Kingdom and Australia and ongoing talks with the United States and some Gulf countries. The UK-India free trade agreement, which entered into force on 15 July 2026, is one example of how India is deepening bilateral trade links at a time when multilateral liberalisation has stalled. Rangarajan’s position was that such deals remain useful, but should not be treated as a substitute for competitiveness at home or as a guarantee against external shocks.
Beyond trade and energy, he said India needs deeper structural reform, more investment in physical and social infrastructure, and faster adoption of technologies such as artificial intelligence, even if the effect on employment remains uncertain. Government policy already points in a similar direction, with measures spanning renewable fuels, natural gas, electric-vehicle charging, refinery upgrades and domestic oil and gas output. But Rangarajan’s central message was that the country must prepare for a harsher global environment without sacrificing efficiency, and that strategic self-sufficiency in critical inputs may now be a practical necessity rather than an ideological choice.
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