WHY INDIA NEED TO BE VOCAL FOR LOCAL?
Author: Suchita Garg, I Year of LLM (Criminal and Security Laws) from Sabarmati University.
By being vocal for local, we aren’t eliminating globalisation, but calling for a new form of it. Self-reliance in the new vision for the country and it is neither exclusionary nor isolationist. Local has helped us through this crisis and has helped us stay alive. By improving our local business and productive efficiency, we can compete with the world as well as help the world.
There needs to be more focus on supporting local products. Home-grown products shouldn’t just be bought but also actively promoted and marketed. We need to encourage local business to improve supply chains across the country and boost the economy. When Prime Minister Narendra Modi addressed the nation, he spoke about the strengths of the nation when it comes to stepping up in times of difficult phrase.
Vocal for Local has become the most trending motto which has emerged during the COVID-19 pandemic. However, the knowledge behind this movement is not new. It finds its origins in the Swadeshi movement which was popularised in 1905 during the Indian independence struggle. Developed and encouraged by Mahatma Gandhi and the other great freedom fighters, Swadeshi was conceived as a way to absorb nationalism and nationalistic pride among Indians.
The coronavirus pandemic taught that we need to make sure we can meet our own demand for products. With nations closing down their borders and consolidating inventories, the movement of goods and services across the world came to a virtual halt. Nations were struggling to meet their basic necessities and to substitute for products which are generally imported from other nations.
Global integration is, of course, creditable. So is the idea behind the division of labour and the specialisation in various products and parts of the production process. But it is equally, if not more, significant to be able to satisfy the basic demands for necessities. It took a pandemic to show us the faults in this seemingly perfect structure. It is also important to have substitutes in place so as to not have to struggle in panic as global supply chains break down.
Vocal for local gives clear importance to the domestic industries and the small-scale Kirana stores. In a time where we were struggling to maintain liquidity and regular cash flow, the vocal for local movement can also be seen as an impulse to reawaken demand and hence, to throw a lifeline to the minor and marginal local industries which were struggling to persist in the wake of the pandemic.
Necessity is the mother of invention. Or over here, scarcity is the mother of invention. In times like, when jobs are hard to come by, it is important to adapt to the crunch by creating new jobs through new innovative ideas. This could mean finally setting up, own dream business via an online marketplace, starting an online consulting business to help people in remote areas or any other great business idea on your mind! With incredible software solutions being developed, the opportunities are limitless!
The advantage is three-fold. First, it will decrease dependence on foreign products, and hence, cut down on the import pressure. Second, it will give a fighting chance to inland companies to survive through the crisis period. Third, it will fit in with the monetary backlash against China, and place India in a strategic position to emerge as the new manufacturing centre of the world.
For an economically independent nation, people need to rise to the occasion and support domestic businesses. People need to create products and services that are made in India, made for India and also made for the world. People also need to refocus our strategies from being profit-driven to becoming more people-centric.
Why the growth of India stopped?
During the Swadeshi movement, when nationalism was in trend, domestic and indigenous industries developed a great deal. However, liberalisation arose in the early 1990s, Swadeshi took a backseat, and Foreign Direct Investment stole the show. With the inflow of external capital and portfolio investments, the Indian markets soon got flooded with an excess of options. Be it goods or services, the products were of better quality and priced more competitively. Local firms were miserably outclassed and gradually faded into oblivion.
The primary reason for this was the presence of excessive bureaucracy and red-tapism. During the 1990s and 2000s, the Indian economy was characterised by the severe bureaucratic control. Since then, however, bureaucratic control has been gradually reduced and industries have been allowed more independence to make their own decisions.
Another reason was the lack of funding options. This was the secondly cause behind the late bloom of the Indian start-up ecosystem. With the relaxation of controls, a number of private equity and venture capital firms have come up, both internal and external. The effect of this can be seen in the increase in the number of Indian start-ups over the last decade. Companies like OYO, Zomato, Paytm and others took full advantage of the easy availability of investors and funding in the Indian economy.
The vocal for local movement or the quest to be self-sufficient
The idea is to promote domestic industries and consume local wherever possible so that the long term effects of an increase in demand can be used to develop the domestic industries and make them self-reliant. This will help in the scale-up of production, and will, make India a manufacturing centre for the world.
At present, some of the sectors are completely dependent on the import of strategic raw materials from different countries, while others are moderately or less dependent.
According to a report published by the Confederation of Indian Industry, 88% of the components used to manufacture cell phones are imported from China. Similarly, the pharmaceutical and medical industry is also dependent on imports, both for medical equipment and medicines. 60% of medical devices are imported, along with raw materials for the manufacture of antibiotics, vitamins and other drugs. The reason why these products are imported from overseas and are not manufactured in India itself is that the manufacture of these raw materials requires large sources of clean water, energy and infrastructural investment. Not only is it economical, but also easy access to better quality products. Then, all Indian firms need to be concern about is the assembling of the final product. It is also because of these reasons why it is challenging for India to reduce its dependency on foreign imports and produce domestic substitutes.
Make in India movement
The manufacturing sector in India has to be developed in such a way that it can provide improved and more competitive prices than the other contenders like Vietnam, Malaysia; etc. The Vocal for Local movement is not the first initiative to make nation a manufacturing hub. It is simply the Make in India movement in a novel avatar.
The Make in India movement was launched in 2014 to give a push to manufacturing firms in India, and with the vision of replacing China as the manufacturing centre. Since its launch, the share of the manufacturing sector in the GDP actually fell instead of rising. This was due to a combination of factors firstly improper policy implementation along with unreasonable ambitions. Secondly, vocal for Local can only be successful if it learns from the mistakes in the Make in India campaign, and adjusts its ambitions and policy implementations accordingly.
The Vocal for Local movement has by now succeeded in its first intention of rising nationalism and the preference to use domestically manufactured items. For prompting export: first is to scale up domestic production, and second is to take up strategic promotion in the targeted nations to build up a market for the products.
Among the list of potential products are textiles, apparels, drugs, furniture etc. To boost local manufacturing, Confederation of Indian Industry suggests measures such as investment in infrastructure, improved port connectivity, specialised initiatives to help people skill-up as well as incentives to promote greater adoption of technology and innovation.
The Fast-Moving Consumer Goods sector is emerging as the poster child for this movement. With companies like Amul, Dabur, Patanjali and Nestle performing at excellent levels, there is simply no need to look beyond borders. The textile and handicrafts sectors are all producing superior products locally. As for India’s service sector, like software, IT and banking services, India is already at par, if not superior, in comparison to the peers. Even the Indian pharmaceutical sector has developed as a global leader during the coronavirus pandemic.
The difficulties lie with the core manufacturing sectors, such as electronic equipment, automobile parts, solar equipment and other components. To develop these sectors, it requires strategic policy implementation as well as infrastructural investment.
Apart from these, to make sure that the Vocal for Local movement does not lose steam after the coronavirus pandemic ends, it also requires specific guidelines and initiatives from the government. But this movement needs to be constant for the long-term. Only time will tell whether India succeeds to replace China as the manufacturing centre of the world?