By Dhurjati Mukherjee
The Prime Minister, Narendra Modi recently exhorted Indians to strike out foreign goods from their lives, seeking to keep the flame of ‘Operation Sindoor’ burning by dovetailing it to his government’s push for self-reliance. He further stated that if we want to build a developed India by 2047and take our economy from the 4th to the 3rd position, we will not use foreign goods. Modi wanted traders across the country to take the pledge, no matter how much profit they make by selling foreign goods.
This observation made while addressing an event at Gandhinagar during a two-day visit to Gujarat last week, by Modi is noteworthyas it may remind people of the pre-independence Gandhi-Tagore controversy regarding boycotting foreign goods. There are two things that need to be analysed in this context – one, do we produce goods that stand up to global standards and secondly, whether India can do without using foreign goods. It appears that what Modi implied is that we should give top priority to India-made goods and, in cases where this is not possible, we should go for imported items.
Analysts believe that there was an indirect reference to China, but questions arise about what consumers would do regarding electronic items which, in some cases, have no comparable Indian substitutes. Not just electronics but there are many sophisticated equipment and appliances in various sectors that are foreign and are essential for different purposes.
Indian manufacturing needs to be given a boost, and as pointed out by the Prime Minister this would get an impetus when increasing number of Indian products are used locally. It needs to be pointed out here that the government should ensure improvement of the quality of the products and give impetus, if necessary, at their upgradation. In this connection, recent reports of medicines produced by government agencies, being spurious does not augur well for the people and the Prime Minister’s plans.
Whether Modi indicated that with India having a large domestic market, this would also motivate foreign investors to come to India also needs serious thinking. Take for example the case of Suzuki, whose cars and motorcycles, produced jointly with Maruti, have been a huge success. Similarly, if Apple starts manufacturing I–phones in India, the huge domestic market will definitely absorb a significant portion of these items.
It cannot be denied that for a large and diverse country like India, there is a need to spread the manufacturing base throughout its length and breadth. Obviously, for this a plan is critical with year-wise targets though various incentives have been dished out to motivate entrepreneurs. Even then, small manufacturers find it rather difficult to get loans from banks while also facing problems of fast transportation, storage etc. These need to be looked into to motivate small and medium entrepreneurs to expand their business and become profitable.
It is, however, distressing to note that Foreign Direct Investment (FDI) declined by 97 percent to $353 million during the last financial year (2024-25), reportedly due to largescale repatriation out of the country, driven to an extent by overseas investors such as Hyundai cashing out through initial public offers. The government has been trying to push FDI into the country as it seeks to tap into growing appetite among global investors to diversify beyond China. But reports indicate that companies are opting to invest in countries such as Vietnam, Indonesia and Mexico. The challenge for India to attract foreign investments is indeed quite tough but only time will tell whether the country would succeed.
While the Prime Minister has rightly maintained India is destined to become the fourth largest economy by end 2025, experts believe that now is the time to place ourselves among the most powerful economies with transformative reforms. As mentioned, what is most vital is making borrowing easy for small and middle-level entrepreneurs and making more resources available with MSMEs. Another important aspect is that high tariffs on critical inputs, particularly in electronics and machinery need to be checked to boost up manufacturing, specially keeping in view where is an inclination to import and use foreign goods.
The thrust on infrastructure has been continuing but the government should try to bring private investment in the infra sector, which unfortunately is missing. Addressing a Confederation of India Industry (CII) event, the Chief Economic Adviser, V. Ananth Nageswaran rightly pointed out that the increased investment would not only enhance capacity but also create more jobs at greater remuneration, leading to an increase in household savings. He regretted the private sector witnessed a profitability growth of four times from Rs 7.2 lakh crore to Rs 28.7 lakh crore as of March 2024, but the capital formation grew only three times in the second decade.
The other key area is the need for emphasis on R&D where unfortunately the private sector is not giving adequate attention. There is need for the Centre to ensure tying industry with research institutions so that the latter could redress their problems and come out with innovative solutions. These need to be considered urgently to boost Indian manufacturing, specially in new areas and make our country’s products more acceptable to the people here and increase the export potential.
Meanwhile, it is good to hear that the country remains the fastest growing economy at 6.5 percent GDP growth globally even as the global economic outlook for 2025 and 2026 remain clouded by multiple challenges, both political and economic, as per the recently released Reserve Bank of India report. The high growth in manufacturing in the last quarter of FY 25 should help improve the quality of Indian products and services.
India has a rather strong economy supported by revival in consumption demand with the government’s continued thrust on capital spending while adhering to the path of fiscal consolidation, healthy balance sheets of banks and corporates. However, the thrust should now be on improving the quality of Indian goods and make them quality-centred and competitive in meeting global standards. Then the country’s population would be motivated to buy them in the coming years and fulfil the Prime Minister’s dream.—INFA
(Copyright, India News & Feature Alliance)
New Delhi
3 June 2025
Follow our WhatsApp channel
