India proactively forging partnerships, strategies to secure national interest: Shaktikanta Das

In an increasingly changing world order, India’s stance is clear: the country stands for a “co-operative and rules-based global system”, a top aide to the Prime Minister said Friday. At the same time, India is “proactively forging partnerships and strategies to secure national interest in a world where power is more diffused”, Principal Secretary to PM Shaktikanta Das said here.

Stating that traditional multilateralism is under severe strain, Das said key international institutions are struggling to deliver on their mandates..

He said that multilateralism is increasingly being sidelined by geopolitical rivalries, protectionism and fragmentation, with critical sectors like semiconductors, rare earths, energy and pharmaceuticals being leveraged as tools of influence and exposing vulnerabilities, especially in dependent economies

Das was speaking on the theme ‘Indian economy, a story of rising credibility’ at the inaugural Bibek Debroy Memorial Lecture. Debroy, former Chairman, Economic Advisory Council to the Prime Minister (EAC-PM), was a contributing editor for The Indian Express.

India stands today at the cusp of a historic journey – from being an incredible India to a credible India, Das said. Noting that there will be headwinds and challenges emanating from “known and unknown sources”, he said the Indian economy is speeding ahead on “multiple cylinders”.

Youthful demographics, digital public infrastructure, the deepening financial inclusion, and technological and artificial intelligence (AI) potential are India’s multiple strengths that are coming together in a historic confluence, he said. “…with the policies that the country has adopted, the wind is in our sails. We are indeed on our path to Viksit Bharat,” he said.

The Indian economy remains resilient and is expected to be the fastest-growing major economy in the world despite multiple and overlapping global shocks since the Covid-19 pandemic, Das said. “The Indian economy rebounded after the COVID-19 pandemic with an average growth of 8.2 per cent from 2021–22 to 2024-25, driven by resilient private consumption and investment. In 2025–26, the real GDP is expected to grow at 7.4 per cent as per the projections of the National Statistics Office. Further, India is projected to contribute around 18 per cent to the global GDP growth in 2025-26,” he said.

Pointing out that the share of trade in global GDP has stagnated, Das said it signals a shift from hyper-globalisation to regionalisation, which have resulted in certain vulnerabilities for the emerging countries. “At a certain level, these trends may result in rising costs and inefficiencies. Emerging markets, and within that the Global South, is particularly vulnerable. For them, economic volatility is getting amplified and opportunities for convergence are getting slimmer,” he said.

In this fluid global landscape, India has embraced Atmanirbharta, a vision of self reliance, as the overarching principle of its policies. “Atmanirbharta is not being isolationist, but a strategy to build core competence and resilience. Economic Atmanirbharta means developing the capacity to produce critical goods and technologies at home and reducing over-reliance on foreign sources,” he said.

Das further said that the idea of Atmanirbharta has been built upon the tripod of — stability, reforms and schemes — that address certain structural gaps in the economy. India has maintained macroeconomic and financial sector stability, brought inflation under control, and is committed to the path of fiscal consolidation, he said.

“The general government’s gross debt-to-GDP ratio declined to 81.6 per cent in 2024-25 from the peak of 88.4 per cent in 2020-21 which saw the outbreak of the COVID-19 pandemic. The IMF has projected it to decline further to 76.9 per cent in 2030-31. This commitment to fiscal prudence is restoring headroom for future counter-cyclical policies and keeping the public debt levels sustainable,” he said.

Das noted that the government has enacted and implemented several landmark reforms across taxation, financial architecture, labour regulations and business facilitation including Goods and Services Tax, the Insolvency and Bankruptcy Code and Real Estate (Regulation and Development) Act along with the adoption of the flexible inflation targeting framework, which mandates the Reserve Bank of India to maintain inflation between 2-6 per cent. Commenting on the recent notification of the four labour codes, Das said these reforms are important because they aim to reduce regulatory complexity, encourage formalisation of the workforce, attract investment, and generate higher employment by offering greater labour-market flexibility along with strengthening wage protection and improving social security coverage.

Referring to government schemes such as production-linked incentives, National Critical Minerals Mission, the Electronic Component Manufacturing Scheme, among others, Das said these schemes and initiatives are not random schemes, but are parts of a larger strategy to build domestic capacities in critical areas and make India self-reliant.

Das said India’s demographic dividend can not be on autopilot and it must be steered and its potential imaginatively harnessed. Also, in areas of technological innovation and AI, machine learning, blockchain, space, biotech, pharma, etc., India has significant potential. “Building on our strong base of STEM talent, as India produces the highest number of engineers and science graduates in the world, we are positioning ourselves at the forefront of the new tech revolution,” he said.