NEW DELHI: Chief Economic Advisor V Anantha Nageswaran on Tuesday warned that the global economic architecture that shaped trade and capital flows for decades is undergoing a “structural challenge” rather than a temporary disruption, and said India must prepare for a prolonged phase of geopolitical fragmentation, technology bifurcation and elevated energy risks.
Speaking at the CII Annual Business Summit, the Chief Economic Adviser (CEA) said the world was entering an era where comparative advantage, free capital movement and rules-based multilateralism could no longer be taken for granted.
“What we are experiencing is not a crisis within the system. It is a structural challenge to the organising principles of the system itself,” Nageswaran said.
Flagging the economic fallout of the ongoing West Asia conflict, he said the crisis had become a “live balance-of-payments stress test” for India, with direct implications for inflation, the current account deficit and the rupee.
“Managing the current account credibly, financing it sustainably, and preventing further currency depreciation are the central macroeconomic imperatives of FY27,” he said.
Nageswaran outlined four structural shifts reshaping the global economy — geo-economic fragmentation, technology bifurcation, the energy transition being used as industrial policy, and the permanent repricing of geopolitical risk.
According to him, supply chains built for efficiency are now being rebuilt for resilience, while technology ecosystems are splitting into competing geopolitical blocs.