India should avoid knee-jerk reactions to tariff volatility in the United States and instead use the current geopolitical churn to build manufacturing scale at home, former Niti Aayog Chief Executive Officer Amitabh Kant said on Tuesday.
Speaking at BS Manthan, hosted by Business Standard, Kant described the US policy environment as fluid and unpredictable.
“America has become very unpredictable and inconsistent in its policies. What policy they allow today is subject to variation tomorrow,” he said, adding that decisions are “subject to constant negotiation” and can change quickly.
His advice was clear: “Therefore, my view is that we should stay the course.” India must seek long-term predictability and “don’t rush in this moment. Wait and watch on the US.”
Disruption as opportunity
Kant framed the present phase as a structural shift in the global economic order that emerged after World War II. Conflicts in Europe and West Asia, alongside the fragmentation of global value chains, signal reconfiguration rather than collapse.
“When there is disruption, when there is a breakdown in global value chains, it provides India a once-in-a-generation opportunity,” he said.
What is unfolding, he argued, is not deglobalisation but “re-globalisation”. “From just-in-time inventories, we’ve moved to friend-shoring,” he said, noting that trust, resilience and predictability will increasingly shape trade ties.
For India, the opportunity lies in manufacturing scale. “You need scale, you need competitiveness,” Kant said, stressing that size and cost efficiency are prerequisites for penetrating global markets.
Cut the cost of doing business
Kant urged India to benchmark itself against China’s manufacturing rise — not to replicate its model, but to understand the economics of scale.
“It’s not just ease of doing business — it’s the cost of doing business which is high in India,” he said.
High credit costs remain a major constraint. “The cost of doing business is high because the rate of credit is high in India.” Statutory liquidity requirements, he said, are elevated by global standards and “need to be calibrated and brought down.”
“Therefore, the rate of credit must come down in India. It is very important.”
He added that power tariffs, land acquisition processes and logistics costs must align with export competitiveness. Goods trade has been most disrupted in the current global environment, while services and capital flows remain relatively resilient, making manufacturing the key battleground.
India’s ambition of becoming a $30 trillion economy hinges on achieving scale in manufacturing, alongside sustainable urbanisation and deeper credit penetration. “Without deeper credit penetration, India cannot grow,” he said.
AI as productivity engine
Kant also highlighted artificial intelligence as a transformative force. “We are sitting in a room at a point of time when the world is going to see the biggest rise in productivity ever,” he said, describing AI as a general-purpose technology comparable to electricity.
From agriculture and health to education and nutrition monitoring, AI can improve outcomes through real-time tracking and analysis. However, he cautioned that AI infrastructure is energy-intensive. “AI is an energy guzzler,” he said, pointing to concerns around electricity and water use by data centres.
India’s response must combine sustainability with scale, including renewable-backed data centres and improved transmission infrastructure.
Kant called for building digital public infrastructure (DPI) for AI, similar to India’s interoperable payments and identity platforms. “In India’s context, we need to make DPI for AI,” he said, adding that inclusion must remain central. “Whatever we do on AI should not end up creating inequality.”
Ultimately, he stressed that growth will depend on private enterprise. “India can grow only on the back of private sector,” Kant said, urging enabling policies that allow business to invest, innovate and scale in a rapidly changing global order.
 "Stay the course on US, seize manufacturing moment at home: Amitabh Kant")
