macroeconomics vocal for local vs globalisation aspirations

1. SM5108:METP
TOPIC: VOCAL FOR LOCAL AND INDIA’S
GLOBAL ASPIRATIONS
-TANUPRIYA SINGH
22SMG1R19

2. Why in news?
⊸ On May 12 2021, the Prime
Minister made it clear that GOI is
committed to remove all domestic
hurdles before manufacturing and
attract a share of the global value
chain.
⊸ Therefore, On May 12th, Prime
Minister called upon Indians to be
“vocal for local”.
⊸ Again addressing the nation on its
74th Independence Day ,PM
urged the country to embrace the
"Vocal for Local" pledge.

3. How do we define Vocal for Local
from Indian perspective?
⊸ ‘Vocal for Local’ is becoming the most
trending phrase which means that all 1.3
billion Indians to be “vocal for local” —
meaning, to not just use domestically
made products but also to promote them.
⊸ Experts feel that it is an extension of the
‘Swadeshi Movement’ which started in the
early 1900s an idea conceived by Father of
the Nation, Mahatma Gandhi.
⊸ The idea of ‘Vocal for Local’ clarion is to
create more local brands and take those to
the global arena.

4. What are the dimensions of Vocal
for Local?
⊸ The idea is to cut down
dependence on reliance of
imports from one country while
encouraging local manufacturing.

5. Self-reliance and “Vocal for
Local” serve each other
⊸ Self-reliance is directly connected to
quality.
⊸ It is widely accepted that the developed
nations are able to dominate global
markets because of their innovative
products and their quality.
⊸ It is clear that the Self-reliance and
vocal for local is to produce goods of
a quality that not only reduces
dependence on imported goods, but
also makes them well sought after
globally while placing India amongst
the foremost exporters of the world.

6. How Vocal for Local Strengthens
the idea of Atma-Nirbhar Bharat.
⊸ The literal meaning of the term Atma-
Nirbhar Bharat Abhiyaan is Self-
Reliant India Movement.
⊸ The Vocal for Local Strengthens the
idea of Atma-Nirbhar Bharat as both
represent essentially an optimistic view
of India’s future by substantially
enhancing its competitiveness in
many more sectors and activities not
currently being tapped for greater
value-addition; creating new growth
nodes and business formations in the
country

8. the idea of Vocal for Local from
the perspective of Globalization.
⊸ “Vocal for local” is not a rejection of
globalisation, but a call for a new form
of globalization i.e. from profit-driven
to people-centric.
⊸ India is the repository of such a wisdom,
it’s the “Vishwa Guru”, teacher of the
world. For example:
▫ “The global brands of today were
sometimes very local like. they
became global from (being)
local.”
▫ The India-led globalisation on
climate, on being helpful to other
countries by offering them supplies
in a time of crisis, led by the
principle of “Vasudhaiva
Kutumbakam”.

9. Underlying Issues in Becoming
Self Reliant
⊸ MarketDistortion: India opened itself to
the global market in 1991 through its
LPG (liberalisation, privatisation and
globalisation) reforms, but remained
hesitant in giving the market model full
freedom.

10. ⊸ Weak Manufacturing: India is far behind
from its target of achieving
manufacturing sector contribution of
25% of the GDP.
⊸ Currently, the Make In India initiative
hasn’t reached its intended goal and
manufacturing is only at about 17% of
GDP.

11. ⊸ Dependence on China: India is dependent
on China for imports related to
electronics, solar equipment,
pharmaceutical (Active pharmaceutical
ingredients) and Capital goods.
⊸ Without developing domestic capacity
for manufacturing in these areas,
breaking away from dependence on
China would not be easy.

12. ⊸ Federal Issue: Information asymmetry with
respect to Central and State
governments can act as a roadblock on
ease of doing business.
⊸ This is particularly important in sectors
like manufacturing, healthcare and
agriculture.

13. Available Opportunities
⊸ Global Manufacturing Shifting Away from
China: Mostly all the multinational
companies are more concerned about
concentration risk of businesses in
China than ever before.
⊸ India can attract these investments and
become the next global manufacturing
hub.

14. ⊸ Ageing Global Population: Considering
demographics, most developed nations
lack the workforce to produce all that
they need in their own countries.
⊸ India’s demographic dividend may
adequately bridge the requirement for a
young human resource for the world.

15. ⊸ Huge Domestic Demand: India is blessed with
a vast array of natural resources, a huge
demographic advantage, a large farming
community, dynamic industrial setup (
sectors like Automobiles and Information
technology) and a set of entrepreneurial
path-breakers.
⊸ In this context, India has almost all the input
as well as output (demand and supply)
factors, those are needed for becoming self-
reliant and stimulating demand.

16. Way Forward
⊸ Promoting Local: In this context, people must
internalise the concept of valuing local
products and artefacts and promoting them.
Only after this the dream of transforming
“Local” India into a “Glocal” India will be
possible.
⊸ Favourable Policy : Competition enhances
innovation and efficiency. However, crony
capitalism weakens local competitiveness and
often diverts resources away from more
efficient and technologically innovative
companies.
⊸ Thus, policies should enhance domestic
competition and eschew crony capitalism.

17. ⊸ Support Control of Critical Value Chains: India
cannot become self-reliant until it has
control over domestic and global supply
chains.
⊸ Thus, there is a need to ensure greater
control over certain parts of the global
value chain to protect strategic
interests, especially in healthcare,
agriculture and defence.
⊸ Strengthen Public Procurement: Some steps
like compulsory e-tendering and the
creation of the Government E-
Marketplace have already created a
more level playing field for suppliers.
⊸ The processes should be quickening
the cycle time for completion of the
“quote to cash” cycle of public
procurement.

18. India is the second largest textile and clothing exporter in the world,
with a total exports of US$ 44.4 billion in FY22

19. TEXTILE SECTOR: Issues
⊸ India is one of the largest producers of
textiles It provides direct employment to 51
million people.
⊸ Due to changing government policies at the
state and central government levels
because of which major challenges are
arising in the textile industry.
⊸ The tax structure GST (Goods and Service
Tax) makes the garments expensive.
⊸ Another important threat is raising interest
rates and labor wages and workers’
salaries. The hubs of textile garment
industries all over India at places such as
Bangalore, Mumbai, Tirupur, and New Delhi.
These manufacturers can produce the entire
range of woven wear and knitwear at a low
cost with reasonably good quality.

20. ⊸ The Indian textile industry has its own
limitations such as access to the latest
technology and failures to meet global
standards in the highly competitive
export market.

21. Impact of vocal for local and make
in India on textile industry
⊸ The ambitious ‘Make in India’ scheme is
already proven boon to the textile
sector. With increased penetration of
organized retail, favorable
demographics and rising income levels
are expected to drive textile demand.
Already several multi-national
companies have invested in India.
These include manufacturers Rieter and
Trutzschler, and apparel retailers like
Zara and Mango (both from Spain),
Benetton (Italy), Promod (France),
Esprit, Levi’s and Forever 21 (all from
US)

23. Estimated growth of the Indian textile industry
The Indian textile and apparel industry is
expected to grow at 10% CAGR from 2019-20
to reach US$ 190 billion by 2025-26. India has
a 4% share of the global trade in textiles and
apparel.

24. Initiatives taken by the
government to overcome such
problems :
⊸ The government has allowed 100% FDI
in the sector under the automatic route.
⊸ India-Japan pact on cooperation in
textiles will facilitate Indian exporters to
meet the requirements of Japanese
importers as per the latter’s technical
regulations.
⊸ A National Technical Textiles Mission is
proposed for a period from 2020-21 to
2023-24.
⊸ The New Textiles Policy 2020 for the
overall development of the sector was
released by the Ministry of Textiles.

25. ⊸ Cabinet Committee on Economic Affairs
(CCEA) approved mandatory packaging
of food grains and sugar in jute material
for the Jute Year 2019-20.
⊸ Amended Technology Up-gradation Fund
Scheme (A-TUFS), estimated to create
employment for 35 lakh people and
enable investment worth Rs. 95,000
crores by 2022.
⊸ Integrated Wool Development Programme
(IWDP) to provide support to the wool
sector.
⊸ The Cabinet Committee on Economic
Affairs (CCEA), approved a new skill
development scheme named 'Scheme for
Capacity Building in Textile Sector.

26. Industry post the covid 19
lockdown:
⊸ During this lockdown textile industry is trying
to focus on alternatives and charting its
return to normalcy. This scenario has
changed the business model for many
industries.
⊸ After lockdown,In 2020, the Indian apparel
industry which was expected to be USD 74
billion is now expected to fall almost 10-
15%.
⊸ It affects a lot in terms of employment, it
was estimated that almost 1 crore jobs
would be lost in the textile industry. In the
Indian textile industry, Diversification of
apparels and textiles beyond cotton (which
is the primary market of India), and
venturing into man-made fiber (MMF) &
synthetics category could be a major shift.

27. Remedial measure to improve the
Indian textile industry
⊸ For making the textile industry
competitive in the global market we
need to focus on technology up-
gradation and expand weaving capacity
to scale-up operations.
⊸ To enable the textile industry to
compete at the highest level we need
support from both central and state
government.
⊸ The state government should provide
all the approval in place, including the
provision of common effluent treatment
plants for rapid scaling up of business .

28. whether Vocal for local
strengthens or Weakens the
policy of Make in India
STRENGTHENS
⊸ Self-reliance and Make in India will
prepare the country for tough
competition in the global supply chain. It
will not only increase efficiency in various
sectors but also ensure quality.
⊸ The focal point of the concept is to make
the nation self-reliant by boosting Make
in India. with more focus on local
manufacturers and service providers, it
will strengthen the economy, improve the
standard of living and most importantly
improve the trade deficit and the balance of
the country.

29. ⊸ Making the country self-reliant in all
spheres- from manufacturing to
supplying. It will help the country to
reduce its dependence on imports and
may also give a boost to exports. The
fall in imports will help reduce the trade
deficit and will eventually lead to trade
surplus.
⊸ ‘Vocal for Local’ can create China
like startup ecosystem. Several
domestic and international companies
are looking for home-grown startups
across the sectors from every nook and
corner of the country.

30. Conclusion
⊸ Some critique this campaign as ‘taking a
step back from globalization’, however, it is
not so. In a highly globalized world like ours,
India has asserted its presence
⊸ ‘Vocal for Local’ does not seek to replace
foreign brands but promote Indian brands.
⊸ The breaks in the supply chain during the
nationwide lockdown exposed vulnerabilities
in the business ecosystem. This drove down
the demand for a range of commodities and
hurt businesses.
⊸ Being ‘Vocal for Local’ is as necessary on a
personal level as it is on a national level. For
these brands to thrive, being ‘vocal’ about
‘local’ is taking a stance for indigenous
entrepreneurship. In the resolve to make
India self-sufficient and self-reliant once
again, we must appreciate the ideas and
innovations that arise from within our
country.

31. SHOOT!!