US tariffs most disruptive to global economy: Economic Survey

The Economic Survey 202526 tabled in Parliament on Thursday ahead of the Union Budget 2026 described USimposed tariffs on imports from its trade partners as the most disruptive development affecting the global economy in recent times reported the PTIThe survey said India must focus on building enduring national capabilities and strengthening economic sovereignty as the space for rulesbased global trade continues to shrink amid growing geopolitical and economic tensionsAccording to the survey the global economy has been subjected to multiple upheavals driven by trade wars strategic competition and protectionist policies It noted that economic relationships are increasingly strategic and contested making the ability to learn and adapt a crucial element of modern statecraftldquoThe most disruptive amongst these disturbances was the imposition of tariffs by the USA on imports from its trade partnersrdquo the survey stated according to the PTIRising protectionism and strategic competitionThe assessment comes amid concerns over the trade tariff and immigration policies of the Trump administration Chinarsquos export controls on critical minerals and growing unease in Western countries over Indiarsquos energy ties with RussiaThe survey observed that strategic competition is fuelling trade wars while countries are competing for access to critical minerals and advanced technologies in a manner described as ldquoreminiscent of a new colonial scramblerdquo as per the PTIDecline of rulebased trading systemThe Economic Survey noted that economic interdependence once seen as a stabilising force is now increasingly viewed as a source of vulnerabilityIt highlighted a resurgence of ultranationalism often rooted in claims of cultural superiority and antiimmigrant sentiment which is shaping political and policy decisions across regionsldquoThis shift is narrowing the space for multilateral cooperation and rulebased trading hardening domestic borders and constraining labour mobilityrdquo the survey said adding that economic strategies are becoming increasingly inwardlooking the PTI reportedGrowing scepticism towards free tradeThe survey said many countries are becoming sceptical of free trade and multilateral institutions which are perceived to have contributed to large and uneven global trade imbalancesIt also flagged concerns over Chinarsquos Belt and Road Initiative suggesting that Beijing is using its fiscal strength to build infrastructure abroad in order to enhance its trade and economic dominance as per the PTIIndiarsquos resilience and the way forwardAgainst this backdrop the survey said Indiarsquos reforms and economic performance over the past decade have helped it remain relevant resilient and adaptable to external shocksHowever it stressed that India must now go further by deliberately cultivating strategic indispensabilityIn a fragmented global economy the capacity to learn without dependence has become a critical strategic skill the survey said adding that ldquoSwadeshi is inevitable and necessaryrdquo reported the PTIEnd of lsquoNaive GlobalisationrsquoThe survey observed that the strategic context has shifted significantly with export controls technology denial regimes carbon border mechanisms and aggressive industrial policies signalling the end of what it termed ldquonaive globalisationrdquoldquoIn such circumstances Swadeshi becomes both a defensive and offensive policy toolrdquo it said enabling continuity of production amid external shocks the news agency reportedThe survey concluded that the key policy challenge lies in encouraging Swadeshi in a manner that strengthens economic sovereignty without undermining efficiency innovation or global integrationwith PTI inputs