Sanctions, tariffs become policy instruments, sometimes weaponised, says PK Mishra
Principal Secretary to the Prime Minister, PK Mishra, on Saturday said export restrictions, sanctions and tariffs become instruments of economic policy and they are sometimes even weaponised.
The top Government functionary also said that wars disrupt energy and food markets while shipping routes and geographical choke points become sources of economic vulnerability.
Addressing the Kautilya Economic Conclave on the subject ‘A World Priced for Risk’, he said India is a major energy importer, and any prolonged disruption to an important maritime route can affect the economy adversely. India’s response, therefore, has combined several layers of protection.
“For energy security, the disruption around the Strait of Hormuz has been a particularly clear reminder of how geography can translate into economic risk,” Mishra said according to a PIB Press release. Without mentioning any country, the top official said export restrictions, sanctions and tariffs become instruments of economic policy, sometimes they are even weaponised.
Mishra said India has maintained substantial stocks, increased domestic production where possible, diversified procurement, and ensured that alternative supply routes and suppliers are available. For example, he said, the number of countries from which India imports crude oil has increased from 27 to 43, which is “very large”.
Mishra said that another example is critical minerals and strategic industrial inputs, this being an area where distinction between efficiency and resilience becomes important.
The top official of the Modi Government said there is another question arising – if the energy will be available or if it can reach its destination. “A disruption in a major shipping route can affect the price of crude oil thousands of kilometres away. Geography has therefore become an economic variable. The same is true for supply chain,” he said. Mishra said India has taken steps to strengthen domestic exploration, processing and recycling through the National Critical Mineral Mission.
At the same time, he said, India has built a growing network of international partnerships on critical minerals, examples of those are with countries like the United States, France, Germany, Netherlands, and many others, for exploration, processing, recycling, technology and supply chain resilience.
Mishra said he believes that the world in the near future will belong to those who can be steady without being closed, careful without being fearful and ambitious without being naive, and India intends to be such a country. “Resilience cannot be insulation from the world. It has to mean the ability to remain open to the world without becoming excessively vulnerable to it,” he added.
