The exhortation to locally-made products is significant amidst escalated trade tensions with the US, and ahead of the shopping season headlined by discounts offered by the likes of American e-tail giants Amazon and Walmart, which owns Flipkart, one of India’s biggest e-commerce platforms.
“Let’s buy things that are made in India, which have the effort of our people, the sweat of our sons and daughters,” PM Modi said on Sep 21. Just a day earlier, he said that India’s biggest enemy is its reliance on other countries.
The latest call for ‘swadeshi‘, which means of one’s own country in Hindi, products can be seen as a continuation of the Modi administration’s thrust for local manufacturing, witnessed in the ‘Make in India‘ programme (with manufacturing incentives) launched in 2014 and reinforced by the ‘Aatmanirbhar Bharat‘ stimulus package in 2020.
In his monthly address to the people called Mann ki Baat in July 2019, Modi urged people to buy and promote locally-made products till the 75th Independence Day on August 15, 2022.
However, both Make in India and Aatmanirbhar Bharat were focused on supply-side reforms to make manufacturing easier in India and increase India’s exports.
A lot of foreign companies—from Apple to Amazon, from Vinfast to Renault-Nissan—have started expanding operations in India since the US decided to impose high tariffs on many countries, most of all on China.
“It is important to note that the government has rolled out various PLI (production-linked incentive) schemes in the past and has allocated at least around ₹3 lakh crore to the industry, which will be rolled out over three to four years,” Saurabh Agarwal, Tax Partner at EY India, told CNBC-TV18.
However, the contribution of value-added manufacturing to India’s GDP has fallen from 17% in 2010 to 13% in 2024, according to data from the World Bank. The contribution of exports (both goods and services) has slid slightly from 22.4% to 21.8% in the same period. A relatively sharper growth in the export of services has helped the Indian economy.
The ongoing tariff tussle with Donald Trump has pushed the Indian government to focus more on strengthening the consumer market, not just manufacturing. “The income tax cuts (effective since April 2025) provided relief to the middle class, now (with the GST cuts) it’s the turn of the poor,” PM Modi said, calling the upcoming period of low GST ‘a festival of savings’.
The combined cost of the cuts to GST and income tax, as well as the upcoming salary hikes for millions of government employees, is likely to be in the tune of $50 billion, which would be borne by the central government.
The Reserve Bank of India, too, has cut interest rates by 100 basis points this year so far.
The goal is to offset the likely hit to exports due to the tariffs imposed by US President Donald Trump. A task force, chaired by Modi himself, is lining up more economic reforms.
“The government of India is perhaps not too large. It’s probably too small, contrary to what people think. The problem is that there are too many people in the outdated parts of the government, and not enough people in the bits that should grow. How many people do we have in cybersecurity? This should be a huge department, but it’s not,” Sanjeev Sanyal, member of the Prime Minister’s Economic Advisory Council, told Moneycontrol recently.
A lot of the reforms, including ones that streamline government processes, are likely to be finalised by the year-end, according to Sanyal.
For now, PM Modi’s call is for the small business owner as much as it is for the consumer. He urged India’s micro, medium, and small enterprises (MSMEs) to manufacture high-quality products, enabling customers to make the switch to swadeshi.
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