- ‘Vocal for Local’ is a concept which dates back to the era of the Swadeshi movement which stared in 1905 as part of the Indian independence movement. As an economic strategy, it helped develop Indian nationalism at the time. After 1947, in the 1950s and 60s we followed a conscious, socialist pattern of development to create and grow a base of domestic big industry. However, this minimized competition and also encouraged protectionism. The era of the 1990s saw a liberalization of the economies across the world, including in India. This led to an infusion of FDI and big investments from MNCs and corporate houses and several joint ventures which made India very competitive. My stint at Hindustan Unilever gave me a ringside view of large scale new investments and launch of several new product categories and acquisitions of brands. Indian IT, ITES and BPO companies were able to take advantage of this world market to become dominant global players. But this also led to a decline in some verticals in the manufacturing sector and we witnessed the emergence of South Korea, China and Taiwan as the new hubs of manufacturing.
So ‘Vocal for Local’ would have been a brilliant strategy for some sectors in India but definitely not in most of the sectors. While ‘Vocal for Local’ is a great idea, we have to recognise that the realities of the global environment have changed significantly. It is no longer possible to create globally competitive products without access to globally competitive resources, and without creating globally competitive synergier
Times have changed radically. India depends to a significant extent on the import of energy, especially petroleum crude, and the modern world economy is a complex web of tightly interdependent value chains where market competitiveness is determined by the two holy grails of price and quality. The automobile industry is a perfect example of this. Today, I may be driving a car where steel has been sourced from China, styling has been done in Italy, and manufacturing has been done in Germany, with components sourced from India. There is an undeniable value chain which operates to create a globally competitive product. Companies which are unable to take advantage of such multi-location, competitive manufacturing strategies get acquired by competitors. Tata Motors' acquisitions of Land Rover and Jaguar are prime examples of this trend.
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