Swadeshi needs substance | Reform, not rhetoric, must lead the way

When a senior United States official uses the word ‘intransigence’ to describe India, it should provoke more than mild irritation in diplomatic circles.

Kevin Hassett, Director of the US National Economic Council, recently remarked that the India-US relationship is “complicated”, citing India’s supposed refusal to open markets to US goods, and its continued purchase of Russian oil. That an ally of decades feels entitled to resort to literal name-calling speaks volumes. It reveals Washington’s impatience and the asymmetry it presumes in the relationship.

American officials, in striking this tone, are merely obeying their chief executive’s directives, as they are bound to do. One is reminded of Luke 23:34: “Father, forgive them, for they do not know what they are doing.”

Tariffs are no longer instruments of commercial bargaining. They have become weapons of political leverage. An African proverb captures it simply: when elephants fight, the grass gets trampled.

Smaller economies will bear collateral damage when Washington and Beijing escalate trade wars, or when US President Donald Trump seeks victory against Russian President Vladimir Putin, or when sudden tariffs fall on long-standing allies. The Trump White House operates less as steady statecraft than as an unpredictable stage — prone to impulsive declarations, sudden reversals, and demands for submission no self-respecting leader can provide. For all its global clout, the US today behaves less like a steady power and more like a school bully.

How this trade contest eventually settles will offer enduring lessons — not only about hubris, but from hubris itself.

Building real sovereignty

The core challenge for India is whether we can build resilience, so such demands never dictate outcomes. A $4 trillion economy cannot be treated like a subordinate. Yet this happens when our political imagination fixates on the actions and opinions of others, while under-investing in the domestic levers that create strategic and economic strength — factories, supply chains, infrastructure, talent, and resilient institutions.

Prime Minister Narendra Modi recently spoke of a vision of swadeshi that is not about ownership of capital but about the dignity of production. “The sweat involved in the production belongs to my countrymen,” he said at the Hansalpur plant of Suzuki Motor Corp in Gujarat, where India’s first domestically made electric vehicle (EV) rolled off the line. “My definition of swadeshi is very simple. I don’t care whose money is being used. Whether it’s dollars, pounds, whatever the currency, it doesn’t matter to me. The products must carry the fragrance of my country’s soil, the essence of Mother India.” This conception of sovereignty is about embedding national capability into every link of the value chain.

India has one-sixth of the world’s population and boasts a celebrated young demographic, yet this potential counts for little unless it is converted into productive value, social development, and lasting economic security. Despite strong aggregate growth, we remain a low middle-income nation.

The current tariffs chaos should be a wake-up call, as financial markets alone cannot build sovereignty. Real strength comes from factories, supply chains, and jobs at scale.

China built resilience through decades of industrial grit; the US struggles under debt and a hollowed-out manufacturing base. India must prioritise industrial capacity and turn demographic advantage into durable economic power.

The scale of India’s ambition is vast, but its structural foundations remain brittle. Manufacturing continues to hover at just 15 per cent of the GDP, despite years of subsidies and production-linked incentives (PLIs). This weakness has exposed India to external shocks, and until it is addressed, slogans will remain hollow.

Hard reforms must move faster — including tax reforms that put more money into people’s hands and ignite consumption. The government’s ambition to overhaul the indirect tax system, by simplifying and reducing GST, could help restore momentum.

Meeting this challenge requires humility in governance and unity across political divides. No ruling party can claim monopoly over sovereignty; no Opposition should undermine it for transient advantage. When tariffs from Washington strike at Indian exports, or when supply chains are disrupted, sovereignty becomes a national task, not a partisan slogan. Every political formation must defend the fundamentals of industrial policy and fiscal stability, for these are national instruments, not electoral tools. In the face of global chaos, the Republic must show one face — pragmatic, purpose, and determined.

MSMEs and the real economy

Sovereignty must be built from the ground up. Unless financing to India’s MSME and SME sectors improves drastically, and the labyrinth of compliance is simplified, talk of self-reliance will remain ornamental. These enterprises form the real economy: they employ the largest share of Indians, they are the first to feel the tremors of tariffs, and they are the backbone of grassroots economy. Yet they are throttled by regulatory costs and don’t have easy access to affordable capital. Building resilience requires unclogging this artery of growth.

Political calls for swadeshi alone cannot substitute for the lived reality of the entrepreneur. Sovereignty on the ground is not built by slogans but by enabling conditions. Entrepreneurs need capital at affordable rates that make them globally competitive. They need credit pipelines that do not choke midway, training that equips them to access and thrive in export markets, and logistics that reduce their costs to world standards. Without these, the call for self-reliance risks becoming a patriotic echo rather than an economic transformation.

A mature State normalises honest debate and adapts decisively. Ambition must also be confronted honestly. Achieving Viksit Bharat by 2047 will demand years of uninterrupted growth — a feat no democracy has yet achieved without slippage. Meeting the target requires sharper policy competence, deeper institutional expertise, and a cadre beyond the limits of generalist administrators.

Nation-building cannot be reduced to rewarding loyalists. India’s challenges demand a broad national bench of talent. While it is tempting for party loyalists to recite platitudes and invoke lofty philosophies as though India has already secured supremacy in AI, emerging technologies, or global trade, this is a moment of truth that demands sobriety.

The government would do well to impose discipline — ensuring that, barring a handful of designated spokespersons, political leaders and functionaries refrain from empty commentary, and, instead, channel their energy into building an ecosystem genuinely conducive to swadeshi competitiveness.

India does not need cosmetic tinkering; it needs reform — reform of doing business, and reform of living for all. We can either persist with socialistic display, or we can summon the courage for real reform.

It is no secret that bureaucracy thrives on the complexity of laws, forms, and endless transactions, while business thrives on the opposite — simplicity, predictability, and certainty of rules. Real sovereignty demands dismantling this architecture of inefficiency and rebuilding it for growth, jobs, and dignity. This is our chance to build India into an indispensable actor in the world economy.

Srinath Sridharan is a corporate adviser and independent director on corporate boards.