Tariffs and Global Conflicts Demand Policy Reorientation: C. Rangarajan
Former Chairman of the Economic Advisory Council to the Prime Minister and former Reserve Bank of India Governor C. Rangarajan has called for a policy rethink in light of rising tariffs and international conflicts. Speaking at a lecture commemorating 35 years of India’s New Economic Policy, organised by Stella Maris College in Chennai, he emphasised the need for India to adapt to a changing global environment.
“Countries are invading other countries, and at the same time, imposition of tariffs has become a real problem,” Rangarajan said. He argued that the current global situation demands a departure from strict adherence to liberalisation norms in critical sectors.
“We really need to readjust ourselves partly to this phenomenon. In some of the critical areas where inputs are very essential or the goods are very essential, we should really move in terms of domestic production — defence goods, production of chips, and adaptation to AI. All of these will have to be done. In some way, we are breaking the rules of liberalisation. But that is what we have to do if the total global situation changes,” he added.
Rangarajan’s lecture, titled ‘35 Years of India’s Economic Liberalisation Reforms: Reflections, Achievements and the Road Ahead’, reviewed the progress since 1991. He acknowledged the success of liberalisation in spurring growth but underscored that new geopolitical realities require strategic autonomy in key industries.
The remarks come amid growing trade tensions between major economies and increased protectionist measures worldwide. Rangarajan’s suggestion to boost domestic production in defence, semiconductors, and artificial intelligence reflects a broader debate about balancing global integration with national resilience.
His call for a policy rethink is significant given his role in shaping India’s economic reforms in the early 1990s. As a former RBI governor and key economic adviser, his views carry weight in policy circles.
