New Delhi: Chief Economic Advisor V Anantha Nageswaran addresses the media during the Economic Survey 2025-26 press conference, in New Delhi, Thurs
Center-Center-Chennai‘Swadeshi’, in its original Gandhian meaning, referred to back-to-basics self-reliance as a way of life in preference to western, imported technology and goods. Over time, it was widened to mean ‘import substitution’ as part of Nehruvian Socialism. Since 2014, the Narendra Modi government has rechristened it many times over -- the ‘Make-in-India’ policy, Atmanirbhar Bharat’ and such like.
No one can fault the basic concept of developing the country’s manufacturing base. It generates wealth and jobs locally, and makes us less dependent on expensive imports. In actual practice though, it has been a fits-and-start policy rather than consistent commitment.
In more recent days, after the withering 50% tariffs imposed by the Donald Trump regime, there have been calls once again to revive the ‘Swadeshi’ campaign -- calls to make local, and buy local. As an ideology, ‘Swadeshi’ is back on the table as volatile global events have made trade terms unpredictable, and international markets increasingly protective.
Articulating this new turn, the Economic Survey released on Thursday says, “In such circumstances, Swadeshi becomes a defensive as well as offensive policy lever: a means to ensure continuity of production in the face of external shocks, and a pathway to build enduring national capabilities that reinforce economic sovereignty. The policy question is no longer whether the state should encourage Swadeshi, but how it should do so….”
Penned by the Chief Economic Advisor (CEA) V Anantha Nageswaran, the policy statement further fine tunes ‘Swadeshi’ to say ‘import substitution’ need not be adopted for the sake of it, in sectors where it is cheaper to import and sources are multiple. On the flip side, protection of industries should not become an excuse for inefficiency and complacency.
The document finally suggests a three-phase way forward to achieve the goal of Viksit Bharat: In the short term, import substitution will replace imported goods with local production; in the medium-term, develop ‘strategic resilience’ -- the broader capability of the economy to withstand external shocks; and finally the long term aim of ‘Strategic Indispensability’ so we fit into the global system so snugly that ‘buying Indian’ is not a choice but a necessity.
Make In India
Over the last 12 years, the performance of ‘Swadeshi’ has not been anything to write home about. Launched with much fanfare, the Make-in-India policy aimed at turning India into a manufacturing hub on the back of a steady flow of foreign and domestic investment. While one did see foreign direct investment (FDI) surge with the country receiving $440 billion in the 2014-21 period, the core target of increasing manufacturing’s share in GDP to 25% remained elusive. In fact, manufacturing hit a low of 15.9% in 2023-24 compared to 16.7% in 2013-14.
In job creation, the campaign could not touch the target of creating a 100 million jobs. Despite the government’s production-linked incentive (PLI) scheme, which offered companies cash returns or tax breaks based on they meeting certain investment and production targets, the private companies have not been ramping up any significant investment in India.
The private corporate sector has not only failed to add jobs or new investment, but it has been averagely functioning at about 75% of capacity. The Centre of Monitoring Indian Economy’s (CMIE) figures reveal fresh private investment in new projects has dipped for 3 years consecutively from Rs 32.4 lakh crore in 2022-23 to Rs 31.7 lakh crore in 2023-24, and further to Rs 30 lakh crore in 2024-25.
Weak global demand and application of AI has seen the Indian IT sector, earlier credited with robust growth and job creation, stagnate in recent months. As of January 2026, the top five Indian IT firms added a net of 17 employees over a nine-month period.
Atmanirbhar Bharat
The term Atmanirbhar Bharat or Atmanirbharta (self-reliance) was first used in 2020 when the Covid-19 stimulus packages were announced. While it came as a replacement for the flagging Make-in-India campaign, the focus was on defense. In August 2020, the defense ministry took off 101 arms-related items from the ‘import list’ and reserved it for domestic production.
Speaking at a Defence Expo in 2022 in Gandhinagar, Union Defense Minister Rajnath Singh said the government had set a target of $22 billion (Rs 1.76 lakh crore) for defense production by 2025, including $5 billion in exports. Quoting a Stockholm International Peace Research Institute (SIPRI) report of 2021, he said the world’s military spending had crossed $2 trillion for the first time, and it was time India cashed in on the rising demand for arms.
By the year 2024-25, India recorded its highest-ever domestic defence production of ₹1.54 lakh crore in FY 2024-25, achieving 80-85% of the target on production and exports. Dependence on foreign arms fell by 9.3% between 2015–19 and 2020–24.
However, India still remains the world’s largest defense importer with an annual purchase exceeding $15 billion. Both Russia and France account for 36% each of this import pie.
These figures hide the fact that for high tech arms, the country has not shrugged off its foreign dependence. For instance, India’s top line 4.5-generation fighter jets are Rafales, manufactured by Dassault of France, while reliance on air defense shields against air attacks, and ballistic missiles is tied to the Russian-made S-400 Triumf surface-to-air systems.
There is a positive swing, though. Swadeshi is seeing a new urgency. The hostile global environment, along with hardening trade terms, may now result in better ground results.