At the IMEC Conclave 2025 held in New Delhi, Dr. Ila Patnaik, Chief Economist at Aditya Birla Group, shared an incisive perspective on how Indian industry can leverage the opportunities presented by the India-Middle East-Europe Economic Corridor (IMEC), while cautioning against the challenges that could emerge without complementary reforms.
Highlighting the private sector’s priorities, she stressed that “anything that reduces costs and improves efficiency is unequivocally positive.” She emphasised that initiatives like the IMEC Corridor, which promise to lower export costs, enhance market access, and shorten delivery timelines, could deliver immense gains to Indian manufacturers: “If initiatives like the IMEC Corridor lower the cost of exports, enhance market access, and reduce delivery timelines — enabling us to meet orders faster and more competitively — it would be a tremendous win for the private sector.”
Dr. Patnaik noted that countries along the corridor — including Egypt and Turkey — offer expanded market opportunities, especially greater access to Europe. However, she cautioned that deeper global integration brings with it heightened competition: “Integration with the global economy is never a one-way street.” While Indian companies could benefit from better market access, foreign products would also find it easier to compete in India’s domestic market.
According to her, this dual dynamic necessitates a strategic approach. “Given that the corridor will take some time to materialise fully, we have a valuable window to undertake critical reforms that make Indian industry globally competitive.” Dr. Patnaik warned that piecemeal improvements, such as enhanced logistics, would not be sufficient if structural challenges persist.
Specifically, she pointed to issues like inverted duty structures, non-GST taxes, high power costs, and an artificially strong rupee as factors that could erode competitiveness: “If input costs are high or currency policies make exports expensive, the benefits of improved connectivity could be nullified.” She added, “A strong rupee can wipe away competitiveness gains by 5% or more.”
To truly seize the opportunity offered by IMEC, Dr. Patnaik urged policymakers to implement a comprehensive package of reforms — facilitating ease of doing business, investing in renewable energy, rationalising tax structures, and managing the exchange rate effectively.
“Thus, as we look forward to leveraging opportunities created by initiatives like the IMEC Corridor, it is essential for policymakers to think holistically, implementing complementary reforms that enable Indian industry to thrive amidst heightened competition. Otherwise, we risk addressing only part of the challenge while ignoring the critical groundwork necessary for sustained success.”
Beyond Sectors: The Need for Policy Certainty
Responding to a follow-up question on which sectors India should prioritise, such as solar manufacturing under the Production Linked Incentive (PLI) scheme, Dr. Patnaik encouraged a broader outlook.
She recounted her experience at a recent clean and green technologies panel, where she stressed that sector-specific focus alone is insufficient. “The first thing I would focus on is not a sector, but policy certainty,” she asserted.
Using the example of wind energy, she noted that inconsistent policy frameworks had deterred private investment: “When the private sector makes investments to make money, if the rules of the game keep changing, private sector will not invest.”
According to Dr. Patnaik, ensuring a stable regulatory and policy environment is fundamental for driving private sector participation across sectors — be it renewable energy, electronics, green manufacturing, or emerging industries.
“Rather than highlighting a few sectors, my foremost recommendation would be to ensure regulatory and policy stability across the board,” she said. She emphasised that a conducive, predictable environment would naturally channel investments into sectors where India already enjoys or can build a competitive advantage.
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