Citing US tariffs, China’s export licensing of many items of interest to India and EU’s Carbon Border Adjustment Mechanism, CEA held that ‘Swadeshi’ must become a ‘policy instrument’ – when trade is ‘no longer reciprocal, markets no longer neutral and supply chains are instruments of state power’, ET has learnt.
At a special session on ‘Aatmanirbhar Bharat & Swadeshi-Intelligent import substitution and More’, he outlined three principles for ‘aatmanirbharta’ – building a ‘Swadeshi ecosystem’ through major regulatory reforms, working with a global vision-oriented policy and investments to world markets, and boosting export competitiveness.
In the way are “legacy regulatory burden” and “colonial-era bureaucracy” that needs to be replaced with an “entrepreneurial” mindset, he opined.
Export route for stronger ₹
CEA also observed that India underperforms relative to its potential and while we “absorb shocks well”, we do not convert resources into “global influence”. “The ultimate goal is global influence. Global influence means the world shifting from ‘thinking about buying Indian’ to ‘buying Indian without thinking’… Without a strong export commitment and competitiveness, the rupee cannot be strong,” he said.
He said that rising imports amid economic growth will need to be financed with exports. Nearly half of the world’s imports from China originate from just 50 global brands and their supply chains and the Union and states must urgently get these to anchor their ecosystems in India for ‘Make in India‘ goals as has been done in case of smartphones, Nageswaran said.IndigenisationIn the presentation made at the conference presided over by the PM, CEA listed areas of ‘indigenisation priority’.
Tier 1 Categorised as ‘non-negotiable’, of ‘high urgency’ and with ‘high feasibility’ towards indigenisation. This includes edible oil and oilseeds, pulses, fertiliser inputs (NPK alternatives), APIs and key intermediates, critical industrial chemicals, power electronics (IGBTs, MOSFETs) and telecom and networking equipment (non-frontier chips).
Tier 2 While of low-to-medium urgency, this is of strategic importance and includes heavy construction cranes, industrial machinery such as pumps, compressors and bearings, EV motors and drivetrains besides noncritical medical devices. This includes strategic core (permanent magnets, battery cells and cathode material besides solar wafers and cell).
Capability needs to be built for another tier which brackets tunnel boring machines, defence electronics, sensors, optics, railway signalling and control systems besides electrolysers and hydrogen equipment, he observed.
Cluster Approach
Pointing out that industrialisation always thrives in ‘clusters’ such as seen in Manchester, Detroit, China’s Greater Bay area or Vietnam’s HCMC, he identified five key clusters to plug the ‘real strategic gap’.
One Semiconductor fabrication and advanced packaging for electronics export sustainability. This ‘needs more than a short-term PLI. Long-term risk absorption is necessary’.
Two Precision capital goods and machine tools without which India cannot climb the ladder.
Three Battery cells and power electronics that carry the risk of EV transition without local value capture.
Four Industrial chemicals — environmental infrastructure and scale chemistry are missing links.
Five Defence manufacturing needs private anchor and export discipline.
Pointing to the correlation between per capita GDP and export share, the presentation noted the success of Karnataka, Gujarat, Maharashtra, Haryana, Telangana and Tamil Nadu.