Atmanirbhar Bharat — What it should ideally mean

Aditya Prakash
5 min readMay 21, 2022

Given the recent push by India to negotiate Free Trade Agreements (FTA’s) with fellow countries after having pulled out of RCEP reflects a course correction of sorts by India. Perhaps even making a case for what Atmanirbhar Bharat should ideally mean.

Photo by Adi Goldstein on Unsplash

Its no secret that, I have been critical of the Atmanirbhar Bharat pitch since it was announced by the Prime Minister at the outset of the Pandemic. I have expressed my difference in opinion in multiple articles. Increasing import tariffs across goods has been alarming and it also goes against a consensus that has been built in India over 30 years since economic liberalization in 1991. Now, the biggest skepticism towards Atmanirbhar Bharat from Free Marketers like myself has been that it may lead to an Autarkic system. An economy that is inward looking and closed to the outside world and most importantly a system that believes that the domestic market is big enough to sustain the Industry without realizing the massive global markets that are there for the taking.

Now, with the onset of the Pandemic, all those who were against globalization and global supply chains have seen their voices gaining strength about shifting all the supply chains back to India. There is certainly an angle of national security which is also at play, which dictates that in critical areas such as telecommunications, critical industrial machinery and software, there is a need to wean away from China. This has been highlighted by suspicion of sensitive data of Indian users being compromised or even cyber attacks on our vulnerable power plants.

All these are legitimate concerns and cannot be ignored, therefore when we look at Atmanirbhar Bharat, there is a need for nuance when considering the National Security imperatives of India. Therefore, In areas which are critical to India’s security, Indigenous solutions are the way to go. In the coming decade, we need indigenous nuclear reactors, nuclear propulsion technology to power our future nuclear submarines and also the ever elusive jet engine technology. Thus, a concerted effort to develop these technologies at home is the need of the hour. So, while we do bring back supply chains back to India, how do we prevent the situation being that of pure Autarky.

In words of the Prime Minister, Atmanirbhar Bharat has been succinctly described as -

“When India speaks of becoming self-reliant, it doesn’t advocate a self-centered system. In India’s self-reliance; there is a concern for the whole world’s happiness, cooperation and peace”

Now, the above words do allude to India not being completely inward looking but having a global outlook and one that wants to cooperate with the rest of the world. So, maybe we can draw some solace in that.

Now, the first thing we need to understand is that it is nearly impossible for any country to be fully Atmanirbhar in any field. We would need to collaborate with the rest of the world to acquire the best of technology. Just to give a few examples, Jet engine technology would require a collaboration with the French to make an indigenous jet engine a reality, even an advanced nuclear propulsion reactor to power Indian nuclear submarines would also most likely require assistance from either the French or the Russians. Same would be the story for India’s quest for getting high end semiconductor technology and the list goes on. On this front, we have seen India make the right moves, with an agreement with Denmark on Green technology, a likely deal with the French for Jet Engine Technology and even the recent push for development of semiconductors in India via the PLI scheme is also a welcome step.

If we look at India pulling out of RCEP back in 2019, retrospectively it has turned out to be a wise decision and in India’s national interest. Rising tensions with China on the border in 2020, issues related to unequal market access, Non trade barriers meant that India just didn’t want to be in a trading bloc lead by China and rightly so. What is also important to note is that India already has trade agreements with ASEAN, South Korea and now Australia in place who are all RCEP members. Thus, by not joining RCEP, India has been able to limit its exposure to cheap Chinese imports while also keeping open supply chains from ASEAN. I have previously opined that India cannot run away from China forever and will have to compete with it in the economic sphere, and I still stand by that argument. India needs to work extra hard to improve its market competitiveness in the next 10 years. This is where rising import tariffs had created a genuine concern among many Indians whether we were regressing back to full autarky which will only result in India becoming uncompetitive in the global markets, and rising costs, deteriorating quality for domestic consumers. This is where India’s new found zeal to negotiate Trade deals comes as a pleasant surprise with the recent trade deals with UAE and Australia. There is also talk of a possible trade deal with EU sometime in the next couple of years. If that does indeed happen, it will most certainly be the single most significant foreign policy achievement since the signing of the nuclear deal with USA. India needs to re-engage with the rest of the world and come with alternate supply chains to counter the Chinese dominated ones. Thus, the answer to the pandemic and increased Chinese aggression should not be turning our backs on globalization but more resilient supply chains.

Thus an Atmanirbhar Bharat which makes in India, but not just for the Indian market but for the rest of the world is what we ideally need. But for that to happen, India must constantly remain open to global markets thus incentivizing Indian Industry to keep innovating and remaining competitive. Our experience in self sufficiency back in the 1960’s was disastrous as India closed itself to the world. We can’t have a repeat of the same. We need to have an export oriented approach as these are crucial in creating jobs, which alone can move away unproductive labor from agriculture into more productive manufacturing jobs. Apart from signing new trade deals, there are some other positives with a new focus on improving logistics in India, by building better roads and having dedicated freight corridors. This will have a cascading effect across the Industry by reducing costs and making Indian goods more competitive. India should continue with further labor reforms which still haven’t been to the extent that many would have wanted and a new look at judicial reforms to speed up litigation in India which also sets India back and keeps investors away.

Internal reforms, new trade deals with friendly countries, collaboration with western powers to get critical technology and increased investment in domestic research and development should be the way forward. In essence buy itself crucial time and set its house in order before it can take on China.