‘Politics now ‘trumps’ economics,’ says Jaishankar, stresses on supply chain diversification

External Affairs Minister S Jaishankar said on Saturday that the world has entered an era where “politics increasingly trumps economics” and emphasised that India must diversify its supply chains to safeguard national interests. Jaishankar was speaking at IIM Calcutta after receiving an Honorary Doctorate from the reputed institute. “This is an era where politics increasingly trumps economics… and that is not a pun,” he said.

In an “uncertain world”, India must guarantee its needs by widening supply networks. He said that the United States, “long the underwriter of the contemporary system”, has now set “radically new terms of engagement” by dealing with countries individually while China has long played by its own rules and continues to do so.

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Jaishankar said that India and the US are engaged in two negotiations, one on a framework trade deal focused on tariffs and another on a comprehensive trade agreement.

The minister added that a third of global production “currently takes place in China”, putting the spotlight on supply-chain reliability even as conflicts and climate events have increased the risk of disruption. India is actively pursuing self-reliance and the gap with big Asian economies is narrowing amid rapid progress in highways, railways, aviation, ports, energy and power, he said.

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“A major power, that too one with higher aspirations like us, must have a significant industrial base. Unfortunately, this was not an assumption necessarily accepted by policymakers before 2014,” he said, adding that the ‘Make in India’ policy is aimed at promoting industrial growth.

He said industries must build domestic supply chains even as India seeks a stronger role in global ones.

He reiterated that India’s foreign policy aims to expand the country’s global footprint as it works toward becoming a developed nation by 2047.

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“When it comes to trade, we will naturally be guided by our people-centric vision, just as our connectivity plans will be guided by strategic as well as economic considerations,” he said.