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Former Reserve Bank of India (RBI) governor Raghuram Rajan has said that India's growth path lies in leveraging its intrinsic strengths and becoming crucial to global supply chains by building on its historic culture of tolerance and respect for all. He stressed that India has the potential to take a leadership role in the services industry and strengthening the country's liberal democratic values was an economic necessity to earn the world's trust in this endeavour.

With reference to competing with a cheap manufacturing neighbour like China, Rajan said India would benefit from focussing on the service component of manufacturing or services more directly as a trusted global supplier. He said ‘our independent judiciary, our liberal democracy, these are critical advantages if we are to go down this manufacturing service-led growth path because this will enable us to earn the world's trust; it's intrinsically necessary.’ 

He stressed that the country's focus should be on its human capital and look beyond manufacturing more products already available in abundance, such as chips, and focus on value-added chip design. He said ‘If we produce 10,000 engineers a year of high quality, we can be a global presence in chip design. So why not do that, rather than pour money into a bucket which is very deep as a resource-strapped country, we need to spend much more cleverly’. Asked if he sees sufficient positives on this growth path from the ongoing free trade agreement (FTA) negotiations between India and the UK, he again highlighted the importance of capitalising on services sector exchanges beyond just agriculture and manufacturing.