Yashovardhan Saboo(Written by Yashovardhan Saboo)
Our Prime minister’s vision of ‘Atmanirbhar Bharat’ is both opportune and essential. It has struck an emotional chord among consumers and suppliers alike. However, even though PM Narendra Modi clearly expressed that his vision of ‘Atmanirbhar Bharat’ did not mean a rejection of international trade or revival of protectionism, some experts and business commentators are mistakenly interpreting self-reliance in a very literal sense, failing to read between the lines and grasp the several dimensions of the vision. Producers, consumers, academics, technologists and administrators, all need to engage with this hugely promising idea.
The strategic importance of the idea is hard to miss.
The Covid crisis has made it clear not only to India but to every large country or trading block, for example EU, that for goods of vital importance such as medicines and medical equipment, the dependence on imports must be limited. The frustration of American firms having shifted production to China, being blocked from shipping vital goods back to their parent company, will not be easily forgotten. On products for other critical sectors such as defence, communication, energy and logistics, the argument against over-dependence on foreign suppliers is even more persuasive. And if the dependence is overwhelmingly on a country with whom our relations are less than friendly, the risks multiply. In such situations, cost considerations become irrelevant; what matters is assured availability in good quality coming from within our own geographical boundaries or from trusted allies.
But atmanirbharta must go beyond strategic de-risking. India will continue to have 16-20 per cent of the world population. The goal of achieving a similar share in world GDP is not unreasonable. This will mean getting at least a sixth of the world’s manufacture happening in India. Tough it will be, and we need not produce everything in India; but if our balance of trade must be close to level, such an overall goal is unavoidable. The world will certainly not stop buying from China – but the policy ‘China plus one’ is gaining traction in international boardrooms. We need to connect with this movement.
The government is taking the bold and necessary decisions at a policy level to underline its serious intent. The changes in defence and government procurement policies are a clear indication. The obligation to display country of origin on consumer products is another good step to let the consumer decide. The emphasis on vocational training in the new education policy is meaningful too.
Sceptics argue that Indian manufacture cannot match the quality or price or technical capability of imported products and that any import restriction will cause costs of production in India to rise, thus penalising the Indian consumer by making goods more expensive. However, they fail to recognize the growing consumer sentiment against purchasing from an unfriendly country. Increasingly the Indian consumer will look at the country of origin, and gladly pay a little more for a product that supports Indian industry. So will the purchasing departments of Indian firms and companies. Both will rightfully expect the quality and performance of domestic products to be comparable to the imported. This is where Indian businesses must step in.
Indeed, enlightened entrepreneurs and professionals are willing to take up the challenge. There is a renewed spirit and desire to invest in new technology and capabilities; in re-skilling of the workforce to boost productivity; and to enhance efficiency by delayering and simplifying organisation structures.
It is worth repeating that the goal is not to make everything at home. Electrical equipment and machinery, nuclear machinery, and chemicals account for the largest import into India from China. Even a small shift to domestic manufacture will move the needle on our trade deficit with China. For a country that successfully launches satellites at the lowest cost in the world, this cannot be too distant a goal. We know that large global players are actively working on establishing world class manufacture in India for diverse products like cell phones, consumer electronics, and solar cells. India is already globally competitive in auto component and two-wheelers. It is but a short step to reduce imports by a third or more by incremental investments.
And if such technology driven products can lead the way, surely lower tech segments like furniture, toys, lights and so on, which account for several billions of rupees of import, can follow.
We business people, from the MSME to the conglomerates, now need to roll up our sleeves and respond with conviction to prime minister’s call; academics and technologists need to align with this goal too; we can count on consumer support if we get our act right; the government is aligning its policies to its intent and we must work together for continuing improvement in ease of doing business. Then, in less than three years, the transformation of Indian industry will start showing, offering not only the best mobile phones in the world proudly made in India, but also ensuring that traditional products such as rakhis, Diwali lights et al are also produced by our own.