Expanding export-driven manufacturing sector helps in stabilising rupee: Chief Economic Advisor

Chief Economic Advisor V. Anantha Nageswaran emphasizes manufacturing's role in stabilizing India's currency amid trade uncertainties.

Stating that the present currency vulnerability has stemmed largely from trade uncertainties that have affected capital flow, Chief Economic Advisor V. Anantha Nageswaran said on Friday that a thrust on expanding the export-driven manufacturing sector should help in stabilising the rupee.

To achieve this, he suggested a three-pronged strategy: import substitution, time-bound protectionism for Indian exporters linked to production and export performance, and investment in climate adaptation before focusing on emission mitigation.

“To be able to export in a world that is increasingly becoming self-centric and to be able to attract capital when capital itself can be held back or used as a strategic weapon isn’t going to be easy. If we don’t get our exports and capital flows correct, the casualty will be the currency. We saw that in 2025,” Mr. Nageswaran said at the inauguration of Tiecon Chennai 2026.

V. Anantha Nageswaran, Chief Economic Advisor to the Government of India, Speaking at Inauguration of TiE con Chennai 2026 in Guindy on Friday. | Photo Credit: B. VELANKANNI RAJ

India’s tryst with import substitution between 1947 and the 1980s was fraught with protectionism that did not elevate capabilities or manufacturing capacity, but rather spread complacency. “So, no protection in perpetuity, but protection in return for quid pro quo obligations on productivity and export performance will have to be the mantra for the next 25 years in a world that’s going to be challenging,” he observed.

“Let us be very clear: renewable energy production requires a lot of energy in and of itself,” he said. Giving details, he said large quantities of silver, polysilicon and aluminium, and a substantial input of power were required to produce one gigawatt of solar power. Similarly, for wind power, 2,866 tonnes of copper was required for which at least 4,80,000 tonnes of ore requires handling, given that the yield of copper was only 0.6%.