'India must move up global value chains'

India needs to shift to hi-tech manufacturing, and the country’s local businesses, especially small enterprises, should integrate into global value chains to focus on 'strategic resilience” rather than complete self-reliance, according to the Economic Survey.

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“The next phase of industriali sation will require a calibrated shift from a model centred mainly on import substitution towards one focused on scale, competitiveness, innovation and deeper integration into GVCs (global value chains),” said the survey tabled in Parliament on Thursday. “Rather than seeking complete self-reliance in every segment, India needs to build strategic resilience through diversification and creating depth of capabilities,”.

A global value chain covers different stages of manufacturing — from design to deliv ery — of a product, with each activity taking place in a different country. For instance, a product can be designed in India, its raw materials sourced from a second country, and it can be fully assembled in a third nation.

The survey's call for global value chain integration comes at a time when countries have formed blocs and compacts to break the stranglehold of value chains in one country. The US has now formed multiple coalitions. For instance, the QUAD criti cal minerals initiative in July 2025; and the Pax Silica, a group of nations working to strengthen the global artificial intelligence value chain, starting from minerals to complex AI models. Such a realignment of value chains will also create opportunities.