India Shifts to Domestic Production Amid Global Tariffs, Breaking Liberalisation Rules

Why in news

C. Rangarajan highlighted India's strategic shift toward domestic production in critical sectors like defense and AI to counter global tariff wars and geopolitical instability.

Background

Former EAC Chairman C. Rangarajan stated that global tariff impositions and geopolitical conflicts necessitate a move toward domestic production. Key focus areas identified include defense goods, semiconductor chips, and AI adaptation.

Facts for Prelims

• FactEconomic Advisory Council (EAC) is a body that advises the Government of India on economic matters.
• S&TSemiconductors (chips) are essential components for modern electronics and AI infrastructure.
• FactLiberalization refers to the reduction of government restrictions in economic activities such as trade and investment.

For Mains

Q. Discuss the challenges and opportunities for India in transitioning from a liberalized trade model to a 'self-reliant' production model in critical technologies.

Dimensions to cover in your answer

• Supply chain resilience
• Impact on global trade relations
• Technological sovereignty
• Fiscal implications of domestic manufacturing

Keywords: Economic Liberalization · Strategic Autonomy · Supply Chain Resilience · Import Substitution · Technological Sovereignty

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