Policy Dependence

India enters every Budget season with renewed confidence in its economic trajectory.

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Strong growth projections, resilient domestic demand and macroeconomic stability reinforce the belief that the economy is on firm footing. Yet, beneath this optimism lies a persistent structural weakness that rarely receives sustained attention: India continues to rely on imports in sectors where domestic capacity should exist.This dependence is not the result of natural scarcity. It is largely shaped by policy choices.

The contradiction is most visible in agriculture. India ranks among the world’s largest producers of foodgrains, yet remains heavily dependent on imports for edible oils and periodically for pulses and animal feed. At the same time, public agencies struggle to manage excess stocks of rice and wheat that exceed domestic consumption needs. Surplus and shortage coexist, not because of ecological limits, but because incentives influence what farmers choose to grow.