What does aatmanirbhar mean for FMCGs in India?: how should they strategize their course of action?

Abstract

With COVID cases increasing every day at a whopping rate, Prime Minister Shri Narendra Modi, in one of his addresses to the nation, announced the “Aatmanirbhar Bharat Abhiyan” or “Self-reliant India Mission”. This is aimed at making India independent of dependence from other countries for raw materials or finished goods for most of its supplies. It can be seen as an extension to the “Make in India” campaign with taglines like “Vocal for Local” being used to promote it. Aatmanirbhar Bharat Abhiyan has come at a time when India-China relations have gone for a toss with disputes going on between the border forces of the two countries. This, in turn, has affected the economic relations of the two countries. There have been country wide protests boycotting Chinese products and investments. With anti-China sentiments flowing across the nation, opportunities for Aatmanirbhar Bharat are bound to come. But what is important is to understand how feasible it is for India to reduce its dependence on Chinese products, which represented 65% of our total imports for the year 2019-20 [1]. Not only this, China is also facing a global backlash, with other countries considering China responsible for the COVID issue. With flow of such global sentiments, is it possible for India to capture some portion of China’s exports? As such, the pandemic, and the political economy of trade with China has created uncertainties about availability of raw materials, components and even final products as well as final demand. A clarion call for self-reliance in this context changes the basic conditions under which firms operate in India. Consequently, they will need to re-evaluate their strategic options.