Swadeshi is inevitable: India’s path from import substitution to strategic indispensability

Swadeshi is no longer just a slogan—it is an economic and strategic imperative, according to the latest policy analysis outlining India’s roadmap to self-reliance and global influence.

The report argues that global trade is no longer frictionless, with export controls, technology denial regimes, and geopolitical tensions making domestic capability both a defensive and offensive priority.

“Swadeshi today is about building enduring national capabilities that reinforce economic sovereignty while remaining globally competitive,” the report states, underscoring that India must balance protection with innovation, efficiency, and integration into global markets.

The analysis introduces a tiered framework for indigenisation:

• Tier I covers critical vulnerabilities like defence, energy, health, and industrial technologies, where assured domestic capacity is essential even if initially costly.
• Tier II includes economically feasible sectors where temporary, performance-linked support can accelerate capability building and export readiness.
• Tier III covers low-strategic or high-cost areas, where import dependence does not threaten resilience, and domestic substitution could raise costs unnecessarily.
  
  Experts emphasise that Swadeshi must be paired with a National Input Cost Reduction Strategy. Elevated costs of raw materials, intermediates, and energy act like hidden infrastructure deficits, penalising downstream manufacturing and exports. “Affordable inputs are foundational to competitiveness; reducing input costs strengthens multiple value chains simultaneously,” the report notes.Advanced manufacturing emerges as a key disciplining system, exposing weaknesses in logistics, quality, and institutions, and driving firms toward global standards. Lessons from East Asia are cited, highlighting the role of an entrepreneurial state that supports, tests, and exits strategically.

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  The ultimate goal, the report says, is strategic indispensability: India must not just withstand shocks but shape global outcomes. Foreign investment, global supply chain integration, and export capability are central to this vision. As the Lowy Institute’s Asia Power Index shows, India ranks third in overall power but 10th in economic relationships, reflecting a gap between resilience and influence that strategic Swadeshi aims to close.

  In short, the path from import substitution to strategic indispensability is a marathon run at sprint speed: disciplined, performance-linked, and globally orientated. The report concludes: “Swadeshi means producing goods of the highest quality at the lowest possible price—so that people buy Indian without thinking.”