The ongoing tensions in West Asia present significant macroeconomic risks in FY27 as the conflict emerges as a short-term challenge to India’s long-term goals, Chief Economic Advisor V Anantha Nageswaran said on Wednesday.
Framing the choice as one between Sreya (delayed gratification) and Preya (instant gratification), he emphasised that India’s growth strategy must focus on medium- to long-term investments even as macroeconomic risks rise in the near term.
With nearly 87 per cent dependence on imported crude and significant reliance on the Gulf for remittances, the impact is both immediate and structural; rising crude prices and disrupted supply chains are already weighing on the economy, the CEA said.
He was speaking at an event organised by MCCI.
Long-term capacity building
India enters this challenging phase from a position of relative strength, having maintained over 7 per cent growth, but the path ahead will require faster decision-making, sharper execution and a clear shift toward long-term capacity building.
The crisis could serve as a “silver lining” by forcing India to diversify sourcing, invest in resilience and accelerate reforms, including in agriculture.
Nageswaran stressed that India’s growth ambitions hinge on accelerating its manufacturing transformation in a world where globalisation is fragmenting. “Cost efficiency alone can no longer drive manufacturing decisions. Resilience, diversification and strategic autonomy are equally important,” he said.
However, execution at the State level — particularly in land, labour and logistics — remains critical for success, he said.
Manufacturing challenges
A major bottleneck to manufacturing expansion is the shortage of skilled labour. India cannot achieve its target of raising manufacturing to 25 per cent of GDP without strengthening trade skills such as electrical work, machining and construction.
Later in a conversation with businessline Editor Raghuvir Srinivasan, Nageswaran pushed back against industry concerns over global uncertainty. “You have to live with uncertainty for the next two decades. It cannot be a reason to postpone investments,” he said.
“The challenge is no longer just about producing more, but about producing competitively, resiliently and at scale in a fragmented world,” Nageswaran said.
Published on April 29, 2026