India Needs To Lower Reliance On Digital Processing Machines, Lithium Ion Batteries, Penicillin: CEA

Global uncertainty index is rising and may well go above the highs in the pandemic and in the Russia-Ukraine war, Chief Economic Advisor Anantha Nageswaran said, speaking at the Raj Bhavan in Kerala on Tuesday.

"We may be heading to the most uncertain phase in the world in three decades", he said, adding that given the uncertainty, we might see fewer new ventures, with countries too looking inward.

"There will be a sense of paralysis and hesitation," he said, adding that it will be the dominant tendency if uncertainty keeps rising. Despite that, China's exports to other parts of the world have seen a rise post trade wars with the United States, Nageswaran said.

"China as a country is very sure that it doesn't want to increase its consumption and wants to be a manufacturing and export powerhouse," he said, adding that India too continues to depend on China for digital processing machines, lithium batteries, penicillin and inputs for solar panels.

India's real mission is generating 8 million jobs a year, increasing manufacturing, making Indian businesses a part of global supply chains and increasing investment rate. This, at a time when the external environment will not be as benign as it was for South-East Asia. "How exciting but also challenging India's development journey will be," Nageswaran said.

While this is currently a lower middle income country, per capita is important because the fruits of development should reach everyone, he said.

India's population is expected to peak in 2035 and will start seeing a modest decline thereafter. This means that we have a window of 18-20 years to make these important changes in the economy, he added.