Building a resilient India – Naushad’s opinion column in Business Standard

Building a resilient India - Naushad's opinion column in Business Standard

Building a resilient India 

Resilience is about inter-dependence, not self-reliance. We need both  domestic strength and international ambition 

An old Chinese curse says, “May you live in interesting times.” It wishes “disorder,  uncertainty, and turmoil” on the recipient. That about sums up the world in these last  six weeks, as the United States and Israel have played soldiers, substituting plastic  guns with their combined armed forces. The war has led to shortages of gas,  widespread supply chain disruptions, and a huge jump in oil prices. How can we deal  effectively with this world of uncertainty, turmoil, and disorder? As we deal with the  immediate challenges, we need to address our need for long-term resilience. That is  my focus in this article. 

An immediate instinct is to turn inwards and seek self-reliance. But the world, and  certainly India, is too dependent on other countries for that to be an effective  strategy. After Galwan in 2020, we tried to reduce reliance on China. We imposed  restrictions on foreign investment and tried to limit imports. What happened? Our  exports of goods to China stagnated at under $20 billion; our imports from China  doubled, from $60 billion to over $120 billion, leading to a record trade deficit of $100  billion. 

The alternative to self-reliance is inter-dependence. We will remain dependent on  others — for energy, for specialised machinery, for aircraft, for intermediate  chemicals, for certain electronic components. What we should seek is that others  are as dependent on us, for things only we can provide, or for products or costs that  are distinctly better. There we have work to do. India must matter much more to the  world. That demands both domestic strength and international ambition. 

Building strength at home  

The medium-term fundamentals of our economy are sound: Decent growth, low  inflation, ample foreign exchange reserves, and robust bank and company balance  sheets. So, while we cope with current disruption, we must work on the longer  term. Domestic strength will come from a strong economy built on world-competitive  and ambitious firms.

For firms to do the right thing, we need the right firms. This is a matter of structural  change. Competitiveness needs to be forced through policy. The best way is by  being open to imports from the best in the world. Going further, a good test of a truly  competitive firm is exports: Can we successfully compete for our core business with  the world’s best on their home ground? The reforms post-1991 were characterised  by churn in firms, with the exit of less competitive firms and more successful ones  prospering. Whole new sectors such as information technology (IT) services and the  pharmaceutical industry rose to prominence, producing some of our most successful  firms. Their competitiveness was proven by success in world markets. That churn  decreased from the 2000s; we need to trigger it again. Exit is the essential partner of  entry. 

We must invest in proprietary technology. As this column has long argued, Indian  industry needs to greatly increase its investment in in-house research &  development (R&D). A good numerical target is to grow in-house R&D five times  from our current 0.3 per cent of gross domestic product (GDP) to the world average  of 1.5 per cent. But even more useful is to undertake some serious benchmarking  with the top 10 or 20 firms in one’s industry. How much do they invest as a  percentage of sales? How many people do they have in R&D? With what  qualifications? And what output does their R&D provide each year—what new  products, what patents and design registrations, what entry into new businesses and  markets? And aim to do better on all these metrics. 

Most of this is about what firms must do themselves, supported by a policy  environment that fosters competition. To build strength at home, industry and the  state have equally important roles to play.  

Building strength abroad 

The other side of domestic strength is international ambition. Our flurry of free trade  negotiations is welcome. We must use our free trade agreements (FTAs) to build a  stronger strategic relationship in general. Our close relationships in West Asia should  help us engage deeply in the reconstruction and recovery of the region from the war.  The European Union FTA is an opportunity for Europe and India to deepen ties  across everything from defence and education to culture. We need, though, a  deepening of foreign relations with much of Asia. Our policy of Act East must go 

from a slogan to, well, actually acting. At a minimum, we could renew and  strengthen existing trade agreements with the Association of Southeast Asian  Nations, Japan, and South Korea. We could evaluate joining the Comprehensive and  Progressive Agreement for Trans-Pacific Partnership, which brings together 11  major economies around the Pacific and a geographically challenged United  Kingdom. It is a deep and wide agreement, with a high bar for everything from  government procurement to investment. Studying what must change for us to qualify  could identify useful domestic reforms, even if we conclude it isn’t yet in our national  interest. 

We claim to speak for the Global South; the Global South seems to have missed  that. A useful approach might be a joint position in the World Trade Organization and the United Nations, and to expand ties and trade across Africa. And we need a  new interest in Latin America, where there is great resonance in many areas,  including the importance of family business and a heterogenous society that accords  equal importance to family ties. 

While the state could lead in ensuring close relationships with all those countries that  matter to us, industry must follow that lead with investment overseas. Our ambition in  industry should be to build a strong international presence. How do our leading firms  become comfortable operating in Europe, Southeast Asia, Africa, Latin America and  West Asia, all at the same time? Confederation of Indian Industry delegations to  countries as varied as Sri Lanka, Indonesia, the UK, Oman and Egypt have received  a message that Indian firms are being actively sought. We need to build on this  welcome, recruiting local managers and local teams. There really is a whole world  out there. The rest of Asia, without China, is three times our GDP. West Asia, 

Turkey and Africa would add over $5 trillion, and Latin America over $7 trillion. Add  those together and we have a market bigger than the US or China. The EU doubles  that. 

Today, our IT services, pharmaceutical, and a few specialised firms in the textile and  garment, auto-component, and engineering industries have a significant international  presence. Indian industry writ large must follow their lead. Many of our international  firms are quite dependent on the US market and need to diversify — Mr Trump’s  tariff games of the last year have been a useful prompt.

A combination of domestic strength and international ambition can build dependence  on India. By working in tandem, government policy and Indian industry can make  India matter to the world and deliver an inter-dependent future.  

Naushad Forbes 

ndforbes@forbesmarshall.com 

Co-Chairman Forbes Marshall, Founding Member Nayanta University, Past President CII, Chairman of Centre for Technology Innovation and Economic Research. His book The Struggle and the Promise has been published by HarperCollins. 

(Published in Business Standard dated 16th April 2026)