The Economic Survey 2025-26 says Swadeshi has become inevitable and necessary for India. The global trading system has changed rapidly. Export controls, technology restrictions, and carbon border taxes now shape global trade. Countries can no longer assume smooth access to markets or advanced technology.
The Survey describes this shift as the end of “naïve globalisation.” India must now prepare for frequent global shocks. In this environment, domestic capability matters more than ever.
Swadeshi as a Strategic Tool
The Survey presents Swadeshi as both a defensive and offensive policy tool. On the defensive side, it protects domestic production during global disruptions. On the offensive side, it helps India build long-term national capabilities.
However, the Survey does not support blind import substitution. Past Swadeshi policies often reduced competition and efficiency. The government must strike a balance between local manufacturing and imports. Domestic production should replace imports only when costs remain competitive and regulatory barriers hold industries back.
Weak Long-Term Vision in Corporate India
The Survey raises serious concerns about India’s corporate sector. Many Indian firms avoid long-term risk and investment. They prefer safe returns over innovation and scale. This approach contrasts with post-war firms in the US, Germany, Japan, and East Asia.
In those countries, companies invested heavily in technology, skills, and manufacturing. They treated workforce development as a national responsibility. Their success strengthened exports, resilience, and social stability.
Low R&D and Limited Manufacturing Push
Indian corporates show low research and development intensity. Many firms avoid advanced manufacturing. Investment often flows into real estate-linked, regulated, or quasi-monopolistic sectors.
The Survey links this trend to governance issues. Family ownership, succession-focused planning, and weak managerial labour markets limit long-term thinking. India also lacks enough patient capital that supports innovation over decades.
Why Private Investment Remains Weak
Private capital expenditure remains a major concern. The government has increased its own capex significantly. Effective public capex rose from 2.6 per cent to 4 per cent of GDP between FY20 and FY25.
Despite this push, private investment stays subdued. Many firms do not depend on fast courts, skilled labour, or stable regulation to earn profits. As a result, they do not pressure the state to improve institutions.
Risk-Sharing Discourages Productivity
The Survey explains why firms behave this way. The system often socialises downside risks. Bailouts, tariff protection, and regulatory concessions reduce pressure to compete. Firms then seek discretion instead of productivity gains.
When productivity does not decide survival, firms stop pushing for better governance. History shows a different path. Companies like Ford, Toyota, and Sony grew because productivity became their only option.
Swadeshi Needs Corporate Partnership
The Economic Survey concludes with a clear message. India needs corporates to act as partners in nation-building. Businesses must see growth as a shared responsibility. Swadeshi can succeed only when firms invest in technology, skills, and long-term capacity.
Done right, Swadeshi can strengthen economic sovereignty without hurting efficiency or global integration.
Read more: Supreme Court Hearing on SIR Petitions