"Connecting communities, empowering nations: Unifying the Regional and Global Economy ."

1. The Changing Landscape of Economic Governance

The global economy is entering a new era—one where the “invisible hand” of the market is increasingly being guided, and often overpowered, by the visible hand of the state. Across advanced and emerging economies alike, governments are reclaiming their role in directing industrial growth, shaping supply chains, and orchestrating technological priorities.
From the United States’ CHIPS and Inflation Reduction Acts, to China’s state-capitalist model, and India’s Production Linked Incentive (PLI) schemes, the trend is unmistakable: industrial policy is back at the center of economic strategy.

The historical parallel is striking. After the laissez-faire dominance of the 1980s and 1990s—when deregulation, globalization, and privatization were the mantras of progress—today’s world is witnessing a recalibration toward national interest, security, and strategic autonomy.

2. China’s Lesson: Growth Without Investor Returns

China presents a paradox that has become a cautionary tale. Between 1992 and 2025, its GDP ballooned from US$428 billion to US$ 18.7 trillion, a fortyfold increase that lifted hundreds of millions out of poverty and transformed global trade patterns. Yet, during this same period, the MSCI China Index, measured in U.S. dollars, delivered a meager ~2% annual growth.

This disconnect—between economic growth and investor returns—reveals the constraints of a state-directed economy where capital allocation is heavily influenced by political priorities rather than market efficiency.
While the state ensured infrastructure, industrial might, and technological dominance, corporate governance and investor confidence suffered.
The result: spectacular GDP figures, but mediocre wealth creation for shareholders.

3. The U.S. Pivot: Industrial Policy 2.0

Ironically, the U.S.—the birthplace of free-market capitalism—is now embracing industrial policy with vigor.
The CHIPS Act, worth over $50 billion, subsidizes domestic semiconductor production to reduce dependency on Asia. Similarly, the Inflation Reduction Act (IRA) offers generous green subsidies, reshaping global energy and manufacturing investments.

This is not about socialism, but strategic capitalism—an attempt to ensure national competitiveness and resilience in a deglobalizing world.
However, as subsidies rise, so do risks of inefficiency, protectionism, and global subsidy races, potentially distorting trade and creating fiscal pressures down the line.

4. India’s Moment—and Its Cautionary Note

India’s renewed industrial policy—via PLI schemes, infrastructure investment, and Make in India—aims to replicate East Asia’s manufacturing miracle while preserving democratic market structures.
Yet, the Indian Express editorial rightly warns: adopting industrial policy does not guarantee success.
It is the quality of governance, institutional design, and linkage to competitive markets that determines whether such policies create sustainable value or simply state-dependent oligopolies.

India’s challenge lies in execution and balance—between strategic direction and entrepreneurial freedom. Over-centralized control can stifle innovation; under-coordinated policy can scatter impact.
The key is to build industrial ecosystems—not just factories—through logistics, skills, R&D, and predictable regulatory frameworks.

5. The Policy Risk Era for Businesses

For businesses and investors, the new order means one thing: policy risk is now investment risk.
From clean energy to chips, healthcare to defense, returns are increasingly shaped not by consumer demand alone but by policy continuity, geopolitical alignment, and subsidy eligibility.
Investors must read not only balance sheets but also legislative agendas and bureaucratic signals.

This creates a dual reality:

Opportunities in sunrise sectors—semiconductors, renewable energy, defense manufacturing.

Uncertainty from abrupt regulatory shifts, tariff changes, or subsidy withdrawals.

6. Historical Perspective: From Smith to Keynes—and Beyond

Adam Smith’s “invisible hand” envisioned a market where individual pursuit of gain yields collective prosperity.
But history shows cycles of state intervention and market correction—from the post-Depression New Deal to postwar reconstruction, from 1980s liberalization to today’s neo-industrial age.
The pendulum now swings again—toward Keynesian realism, shaped by climate imperatives, geopolitical rivalries, and technological nationalism.

Yet, this should not mean rejecting markets altogether. The lesson from both history and China’s experience is clear:
Without transparency, competition, and accountability, state-led growth can produce scale—but not sustained value.

7. The Road Ahead: Designing Smart Industrial Policy

The challenge for the 2020s and 2030s is to design smart, not heavy-handed industrial policy.
That means:

Targeting innovation ecosystems, not individual firms.

Ensuring sunset clauses to prevent perpetual subsidies.

Embedding market feedback loops into state programs.

Balancing strategic autonomy with global cooperation.


Countries that succeed in this balance—leveraging the state’s direction with the market’s dynamism—will define the next global growth wave.

The Hybrid Future of Capitalism

The era of pure market capitalism is over, but the world is not returning to the old command economy.
We are entering a hybrid age—a pragmatic blend of state strategy and market innovation, where competitiveness is as much about governance and resilience as it is about efficiency.

For India, this is both an opportunity and a warning.
Industrial policy must create entrepreneurs, not dependents; global champions, not local monopolies.
If well-calibrated, it could unlock India’s long-awaited manufacturing transformation.
If mismanaged, it risks repeating the mistakes of others—growth without gain, and policy without progress.
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