External shocks, not domestic weaknesses, behind current economic challenges: Rangarajan - The HinduPublished - June 08, 2026 09:01 pm IST - HYDERABADC. Rangarajan | Photo Credit: File PhotoMany of the difficulties confronting the country are the result of external or exogenous shocks like the international trade disruptions and tensions in West Asia, rather than domestic weaknesses, former chairman of Economic Advisory Council to the Prime Minister, and Chancellor of ICFAI Foundation for Higher Education, C. Rangarajan said on Monday.Speaking at the 18th annual doctoral thesis conference here, he said that in spite of a falling rupee, India’s fundamentals remain strong, and the end of the war would revive the value of the rupee. The recent currency pressures have been influenced largely by capital outflows, rather than by structural weaknesses in the economy, he observed.To mitigate the impact of external shocks, Mr. Rangarajan proposed a three-pronged approach: strengthening diplomatic engagement and diversifying supply sources in the short term, building strategic reserves in critical sectors such as energy in the medium term, and pursuing efficient, selective import substitution in strategically important industries over the long term.India’s objective should not be self-sufficiency at any cost, but rather the development of competitive domestic capabilities in critical areas where excessive dependence on imports may pose risks, he added. He also stressed the importance of accelerating the transition towards alternative and sustainable energy sources, including renewable energy and electric mobility, to strengthen India’s long-term energy security and reduce vulnerability to global disruptions.Published - June 08, 2026 09:01 pm ISTSign in to unlock member-only benefits!Access 10 free stories every monthSave stories to read laterAccess to comment on every storySign-up/manage your newsletter subscriptions with a single clickGet notified by email for early access to discounts & offers on our products${ ind + 1 } ${ device }Last active - ${ la }