There is historical evidence that whenever there is a sharp economic downturn, it engenders protectionism. The COVID-19 pandemic has led to this year’s forecasted GDP reductions in the major trading nations, leading to governments resorting to protectionism and economic policies taking an inward turn. The actions after the Great Depression of the 1930s led to import restrictions. In modern times governments resorted to extensive scale subsidisation of farmers and manufactured in response to Global Financial Crisis. Every time a widespread economic downturn occurs, governments use this as an excuse to discriminate against foreign commercial interests.
In the short run, doing business in India will be expensive. However, a united front, especially by private players, will benefit the country’s economic resilience by promoting local manufacturers over cheap Chinese goods. Prime Minister Modi’s call for “Atmanirbharta” is a step in the right direction, especially under the circumstance when viable supply chains are in dire need to jumpstart the national and global economy. The economy is not going back to the pre-1991 days. Now it has a robust service sector, a world-class automobile manufacturing sector and the world is now looking to India to improve its infrastructure to put in more investments. Indian companies today, are competing on the world stage and unlike then are not afraid of the competition. Rest assured, Atmanirbharta is not promoting protectionism but reducing dependence on one country while promoting India's interest to contribute to the world economy and be a part of the diversification of supply chains trend.