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Informist, Saturday, Oct. 3, 2026

 

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--PM's Principal Secy Mishra:Confronting not merely risk, but also uncertainty
--PM's Principal Secy Mishra: AI bringing new forms of uncertainty
--PM's Principal Secy Mishra: Tariffs being used for strategic purposes
--PM's Principal Secy Mishra: Export controls being used for strategic purpose
--PM's Principal Secy Mishra: Econ policy, geography more closely intertwined
--PM's Principal Secy Mishra: Econ resilience can't be isolated from the world
--PM's Principal Secy Mishra: India increased domestic production of key raw materials
--PM's Principal Secy: India diversified procurement of key raw materials
--PM's Principal Secy: India ensured alternative supply of key raw materials
--PM's Principal Secy: India continued fisc consolidation while doing capex
--PM's Principal Secy Mishra: Must ask whether cost to resilience is justified
--PM's Principal Secy Mishra: Should not pay premium for every disruption
--PM's Principal Secy Mishra: Security, sustainability increasingly converging
--PM's Principal Secy Mishra: Mkts will not price all econs equally amid risks
--PM's Principal Secy: Mkts will price econs on macro strength, resilience

 

NEW DELHI – Markets will price risks, but they will not price every economy in the same way, Principal Secretary to the Prime Minister P.K. Mishra said Saturday. Markets will price economies based on their macroeconomic strengths and their ability to absorb the risk that they face, Mishra said while speaking at the Kautilya Economic Conclave 2026. 

 

Speaking about India's strength amid evolving geopolitical risks, Mishra said India has shown resilience through fiscal credibility, financial strength, diversified trade relationships, reliable institutions, and capacity to respond. "Resilience, therefore, is not a choice between self-sufficiency and globalisation," he said. "The most rational approach lies between the two. Domestic capability, where vulnerability is strategic. Diversification, where concentration is risky."

 

Mishra's comments come amid heightened external risks, not just for India, but for all economies with the world still dealing with geopolitical issues, including the ongoing war in West Asia. India also faced external sector risks with persistent outflows from Indian markets during Mar-Jun. July onwards, however, inflows have improved. Besides, India's sovereign ratings were upgraded by a notch to "AA-" from "BBB+" from Japan Credit Rating Agency Ltd. on the back of India's "solid" economic growth, the effectiveness of economic policies that strengthen the foundations for growth, and the improved soundness of its financial system.  

 

According to Mishra, India has focussed on fiscal consolidation without compromising on public spending. India has also taken a host of domestic measures to insulate the economy from external risks, including increasing domestic production of key raw materials and diversifying their import sources as shipping routes and other supply bottlenecks led to disruption. 

 

These measures, however, come at a cost, he said. "The question is what level of pricing it should be or what level of pricing we can afford. We are all familiar with the insurance premium. We pay a certain cost today to protect ourselves against a loss that may or may not occur tomorrow," he said. "The question is what happens if the premium is too high? Resilience works in much the same way."

 

A strategic stockpile has a carrying cost, he said, adding that maintaining multiple supplies may mean sacrificing some economies of scale. Domestic production may cost more than importing from the cheapest global stores, and this is realised only when the disruption occurs, Mishra said.

 

According to the top bureaucrat, the economic question, therefore, is whether resilience is desirable. "It is whether the premium we pay for resilience is justified by the cost of risk we are trying to avoid?" he asked rhetorically. Domestic resilience must also not mean isolation from the world, he added.

 

"The key question is whether that cost is justified by consequences of the risks being insured against. We should not pay a premium for every conceivable disruption. But where a disruption can impose a very large economic and social cost, investing in resilience can be economically rational," he said.

 

Mishra said that in the current global context, security and sustainability are increasingly converging. "Energy security, food security, technology security, and environmental sustainability were once treated as separate objectives. They are increasingly connected," he said. 

 

Developing cleaner domestic energy sources can reduce exposure to imported energy volatility while advancing climate objectives, he said. Similarly, building capabilities in critical technologies strengthens both competitiveness and strategic resilience, he added. 

 

In all, Mishra said that geography and economic policy is also more intertwined now than earlier, with the former emerging as an economic variable. The economic logic of globalisation was built around specialisation, he said. While "produce where costs are lowest and move the goods efficiently across borders" as a logic remains relevant, the experience of the pandemic, geopolitical conflict and more recent disruptions has highlighted another consideration, he said. "The cost of interruption. The supply chain that is efficient in normal times may be fragile if a single load supplier for geography becomes unavailable," he said.

 

The interconnectedness of geography and economic policy is especially visible with tariffs and export controls being used for strategic purposes by some countries. Artificial intelligence is also bringing new forms of uncertainty, he added. "All this together creates a situation of great uncertainty, Mishra said. "We are increasingly confronted not merely with risk but also with uncertainty. The distinction is important. Risk is something whose probability we can at least in-principle estimate. Uncertainty arises when we cannot reliably assign probability," Mishra said.  End

 

Reported by Priyasmita Dutta and Sagar Sen

Edited by Deepshikha Bhardwaj

 

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