Former Reserve Bank of India Governor C Rangarajan has called for a recalibration of India’s development strategy to address shocks such as the disruption of the Strait of Hormuz and changing global trade conditions. He said the country should build reserves of critical commodities, including crude oil, while strengthening domestic production and reducing dependence on imported energy. Speaking at the 16th convocation of the ICFAI Foundation for Higher Education in Hyderabad, Rangarajan said recent tariff actions by the United States and the conflict involving Iran had disrupted global trade. He said the international system’s reliance on tariff consensus and the free movement of goods through sea routes had been weakened, creating a need for India to prepare for similar disruptions. Rangarajan said self-reliance should not result in inefficient or blanket import substitution. Instead, the Make in India programme should focus on productivity, competitiveness and production for international markets, while identifying critical sectors that require greater domestic capacity. He also called for substantially reducing energy import dependence through the development of alternative energy sources. He said India needed to adopt new technologies, including artificial intelligence (AI), despite uncertainty over their effect on employment. Free trade agreements (FTAs) with the UK and Australia, along with negotiations involving the US and Gulf countries, were positive developments, but India should remain cautious in view of the results of earlier agreements. He added that structural reforms in factor markets and greater investment in physical and social infrastructure were necessary. Rangarajan said innovation would be central to competitiveness as globalisation changed. He cited South Korea and China, ranked 4th and 10th respectively in the Global Innovation Index, compared with India’s 38th position, as examples of the link between innovation and economic strength. He said India should pursue efficient import substitution for selected critical products without compromising efficiency. Ajai Chowdhry, co-founder of HCL and chief guest at the event, urged graduates to ensure that their aspirations exceeded available resources.