India enters 2026 at a rare inflection point in history. Our macroeconomic fundamentals are among the strongest we have seen in decades. Growth is resilient; inflation is tamed; infrastructure creation is accelerating; digital public infrastructure is quietly transforming citizen interfaces; and capital formation is returning to the centre of policy imagination. And yet, the world around us has become structurally fragile.

Geopolitics now shapes trade more than economics. Capital flows respond more to fear than to fundamentals. Technology investments are leveraged in ways that create systemic risk. Supply chains are being redesigned for security rather than efficiency. The margin for error in global markets has become thin. In such a world, the old idea that “growth alone will protect us” is dangerously inadequate. What protects nations today is institutional credibility, execution capacity, and adaptive governance.

The Economic Survey 2025–26 captures this truth with refreshing intellectual honesty. It recognises three overlapping global risk regimes—managed volatility, disorderly multipolar fragmentation, and low-probability but high-impact systemic shocks. In all three scenarios, India remains relatively better positioned than most economies but not insulated.

Our real vulnerability is not growth; it is dependence on external capital flows and the cost of capital that follows.........

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