India's principal secretary warns domestic production costs rise but boosts crisis resilience

At the 5th Kautilya Economic Conclave, Principal Secretary Mishra highlighted the trade-off between higher costs of domestic production and the security it provides during supply disruptions. He said that while importing from the cheapest sources saves money in normal times, the real benefit of local capacity emerges when global shocks hit. Resilience, he explained, should not mean isolation but the ability to remain globally engaged without excessive dependence.

Businesses are responding to heightened uncertainty by postponing new projects, expanding supplier bases, increasing inventories, and maintaining spare capacity. Governments are similarly building strategic reserves, bolstering fiscal buffers, and investing in capabilities that may seem costly now but become valuable in crises. Mishra warned that simply substituting imports with home-made goods is insufficient; the goal must be to develop competitive, scalable industries that can eventually export.