Finance Ministry flags AI, supply-chain risks, calls for faster policy implementation

NEW DELHI: The Finance Ministry has said that global developments in artificial intelligence (AI) and the weaponisation of supply chains highlight the need for India to strengthen its long-term economic resilience, stressing that swifter policy responses and implementation will be critical to attract both domestic and foreign investment.

According to the Monthly Economic Review released by the Department of Economic Affairs under the Ministry of Finance, recent global developments serve as a reminder that India still has considerable ground to cover to build long-term resilience and strategic leverage.

“Global developments related to AI and weaponisation of supply chains in general are reminders of the distance India needs to travel to achieve long-term resilience and strategic leverage,” the review said.

The ministry said quicker policy responses and effective implementation would be essential to encourage investment in the Indian economy. “Swifter policy responses and their implementation are vital to encourage foreign and domestic investment in the Indian economy,” it said, adding that the coming years will continue to require policymakers to remain prepared for global uncertainties.

The review noted that the continued implementation of strategic initiatives across sectors such as semiconductors under Semicon 2.0, critical minerals, coal gasification and shipbuilding is expected to strengthen domestic manufacturing capabilities, improve supply-chain resilience and enhance the competitiveness of India’s industrial sector. It added that recent measures aimed at streamlining regulatory compliance and facilitating manufacturing would further support the country’s industrial growth.

According to the review, progress in emerging sectors such as commercial space and hydrogen-based mobility reflects the broadening of India’s industrial and technological capabilities and will support long-term sustainable growth. At the same time, the ministry cautioned that sustained firmness in prices of industrial metals, rare earths and other critical minerals underlines the importance of building resilience rather than merely reacting to vulnerabilities.

The review said creating adequate buffers across energy resources and industrial metals will remain important for maintaining India’s industrial strength and macroeconomic stability in the years ahead. It added that while recent years have required economies to prepare for external shocks, the period ahead is unlikely to be any different, making sustained efforts to strengthen resilience and strategic capabilities essential for India’s long-term economic growth. (ANI)