In May 2020, as COVID-19 caused India's economy to weaken like a sudden drop in blood sugar, the launch of Atma Nirbhar Bharat acted as a sweet revitalising boost with a ₹20 lakh crore financial package (PIB Delhi, 2020). The initiative aimed to strengthen India’s manufacturing sector and reduce import dependency, promoting slogans like "local for global" and "vocal for local” (PIB INDIA, 2020). Despite these efforts, significant challenges remain, particularly in the manufacturing sector and MSMEs (The Economic Times, 2024).
India’s manufacturing sector, particularly MSMEs, faces significant challenges from rising imports, primarily from China (The Economic Times, 2024). Despite efforts to promote domestic production, cheap Chinese goods, such as low-quality textiles and electronics, flood the Indian market, making it harder for local manufacturers to compete (The Economic Times, 2024).
Many MSMEs have shifted from production to trading due to limited access to affordable credit, rising production costs, and weak domestic demand (The Economic Times, 2024). This has led to job losses, slower growth, and the gradual decline of traditional manufacturing hubs.
Rising imports contribute to trade deficits, weakening the economy and putting pressure on the rupee. This hampers industrial growth, limiting the potential for innovation and self-reliance. Despite the government’s push for self-sufficiency, challenges in reducing import dependence hinder progress toward a more competitive manufacturing sector and undermine long-term goals like Make in India and self-reliance.
To counter these issues, the government introduced the Production Linked Incentive (PLI) scheme, which aims to boost domestic production and reduce reliance on cheap imports [Self-reliant India (AATM Nirbhar Bharat Abhiyan: IBEF 2024)]. By incentivising local production, the policy intends to strengthen India’s manufacturing capabilities.
However, the gap between the policy's ambitions and its execution remains a concern. A rushed decision-making process focused on achieving ambitious economic targets, like the $5 trillion economy goal, has limited the policy’s effectiveness (First Post, 2024). By contrast, Japan's approach, which emphasises thorough risk assessments and contingency planning before making decisions, provides a more thoughtful model for India.
India’s dense population and complex socio-economic landscape make decision-making challenging, but, as AMD CEO Lisa Su has stated, no problem is too difficult to solve with the right mindset and perseverance (Lisa Su, 2024).
A focus on thorough planning rather than rushed execution can help reduce errors and avoid negative consequences. Furthermore, India’s policy approach should shift from solely focusing on GDP growth to prioritising the well-being of citizens at the grassroots level, ensuring that economic policies have a direct impact on people’s lives.
Despite the challenges, Atma Nirbhar Bharat has laid the foundation for change. To ensure its success, the government must strengthen infrastructure, foster innovation, and provide better support for MSMEs. A more balanced, thoughtful decision-making process will not only help the policy succeed but also drive India toward greater economic resilience and global competitiveness. In the long run, Atma Nirbhar Bharat’s success will depend on policies that prioritise sustainable growth and ensure that economic benefits reach all citizens.
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