Priyanshi Srivastava
SVKM’s NMIMS School of Law, Mumbai
VOCAL FOR LOCAL:
On 13th May 2020, Prime Minister Narendra Modi while addressing the nation came up with a new slogan “Vocal for Local”. In his speech, Prime Minister mentioned about how to revive India’s economy which is affected the most by the current crisis of Covid-19 pandemic. He announced an economic package worth ₹ 20 lakh crore to the revive the Indian economy. Prime Minister Narendra Modi urged the people to come forward and join the mission of being a self-reliant country or commonly known as Aatma Nirbhar nation by not only supporting the local business but also promoting them. Since then, the hashtag Vocal for Local has been trending on all social media handles and also gaining popularity amongst the commerce and business industry in India. In the era of Covid-19 this hashtag is playing a major role. Vocal for Local describes how each citizen should go for a self sufficient and self-reliant India. This ideology is linked with the Make in India campaign. PM Modi mentioned that during the lockdown and Covid-19 crisis it is the local vendors, products and services that have helped the entire nation to survive. He further added that this pandemic has taught us how important the local manufacturers, market and supply chains are. To present the local skills and products in India, we need to stand together to proudly promote the “Make in India” campaign followed by Vocal for Local.
SWADESHI MOVEMENT:
The phrase Vocal for Local is deemed to be understood as the extension of the ideology of the Swadeshi Movement. The movement was started by some of the great freedom fighters of our country, one of them being Mahatma Gandhi, the father of the nation. The Swadeshi Movement aimed and focused on the use of locally made products. it promoted the boycott of all the British made goods. However, in the 1990s economic liberation began in the wake of 1991 economic crisis, which lead to a steady rise in Foreign Direct Investment (FDI) with the entry of global brands into the country. This phenomenon led to stiff competition between the home-grown players and foreign players as the latter offered better quality products at competitive prices. Unable to compete, many small Indian players got acquired by big multination companies. Except for four diversified conglomerates such as TATA, Godrej, Reliance and Raymond’s, to name a few, many small brands fell by the wayside.
The major reason why most of the local brands failed is the lack of funding, mentoring, the archaic laws, the challenging business environment in nineties and early 2000 and the prevalence of tapism etc.
However, over the last one and half decades things have improved, the reason being the relocation in FDI norms, venture capital firms and entry of foreign private equity responsible to a large extent for the creation of India’s start-up ecosystem.
INDIA-CHINA BORDER DISPUTE AND AATMA NIRBHAR BHARAT:
After the clash between the Indian and Chinese troops on 15th June 2020 at the Galwan valley, where 20 Indian soldiers were killed, India bursted into anger and started burning Chinese products and appliances. Once again across the country there was call for boycott of Chinese goods. PM announced and started a campaign called Aatma Nirbhar Bharat in which he urged the citizens to buy and promote local brands. He mentioned that all global brands were once local. He further in his address stated that to achieve self-reliance, there should be an economic package, which should focus on land, labour, and equality laws. The economic package worth ₹ 20 lakh crore will help cottage industries, home industries, small scale industries, MSME’s which are the means of livelihood for crores of people. He mentioned about India being self-reliant and said that these are five pillars on which India stands: economy, technology-driven system, infrastructure, vibrant democracy and demand.
CHINA’S CONTROVERSY AND ITS IMPACT ON INDIA:
One of the major factors that contribute to cheaper Chinese products is cheap labour. Other than labour, raw material and business ecosystem also have a significant impact on Chinese business. The Chinese government supports all industries by making the production very easy by following a value added tax (VAT system).
- IMPORTS OF RAW MATERIALS
India imports raw materials as well as finished goods from China. For example: – Minerals, electronics, steel pharmaceuticals etc. When we urge Indians to boycott such products it can include only finished goods and not unfinished products. Because boycotting raw materials is not possible as it requires a strategical approach and cannot be done instantly.
- DRASTIC CHANGE IN THE GDP
India imports many finished, unfinished goods from China which includes consumer based durable goods too. Goods like electrical devices, mobile phones, equipment, medicines etc. India’s smartphones market is flooded with Chinese smartphones like Xiaomi, Oppo, Vivo, Lenovo etc. If the imports of such products will decline or India boycotts such products then India has to witness a drastic change in the GDP (Gross Domestic Product).
- LOOPHOLE IN MAKE IN INDIA CAMPAIGN
The campaign which was launched by Prime Minister Narendra Modi was known as Make in India campaign. No doubt it created a lot of job opportunities for thousands of workers in India. But on the other hand, many Chinese firms have also come and established their units in India. The have employed thousands of workers in their units. So, the problem arises that while boycotting Chinese products they may also stop their production units which will lead to thousands of workers becoming unemployed.
- CHINA IS INDIA’S SECOND LARGEST TRADE PARTNER
China is one of India’s key trading partners. If we look at the statistics, in 2018-2019 India’s exports to China were $ 16.7 billion, while imports were $70.3 billion, leaving a trade deficit of $ 53.6 billion. India’s highest trade deficit is from China. So from this data it is clear that India will be the most affected one since it is about trade as China can easily export from any other country. By stating this it does not mean that India could not do this, but definitely it can not do it in a short run.
Many countries in the world have used such kind of short-term boycotting of products strategy but the same failed. To protest Japanese colonization in 1930, china tried boycotting Japanese products but failed. Similarly, the US in protest against France’s refusal over sending troops attempted to boycott French goods but failed again.
The Confederation of All India Infers (CAIT) mentioned that according to trade deficit if we start boycotting Chinese goods there will be risk for the traders and the GDP will tremendously decline.
CAIT realises that segregating the Chinese product which means making all the products domestically will be a huge challenge. Taking some percentage into consideration 20% of the auto components 70% of the electronic components, 45% of consumer durables 40% of leather goods and 70% of pharmaceutical ingredients which India imports comes from China. Substituting all such goods will not be an easy task. The dependency on China is huge.
LOCALS IN INDIA:
It’s the similar form of swadeshi movement when you say local. Besides products manufactured by Indian producers, it will also include international equity firms, but only where Indian equity exceeds 51%.
Local means a product that is used locally, produced by our indigenous industry — small, medium, or cottage. It also includes GIs, such as Kancheepuram silk, Moradabad metal art, Firozabad glass and Jaipur Blue pottery. This also means decentralized model of development and the use of domestic capital and abilities.
It is sad that in the past, policymakers never had faith in indigenous abilities, wealth, and expertise. They focused on the public sector and later on foreign capital and MNCs was overemphasised. PM Modi’s call for a ‘vocal for local’ is a welcome departure from the current globalization and liberalization-based policy, especially the development model dependent on foreign capital.
It is time to revive those local industries taken for granted in the globalizing age. It is also time to introduce economic policies that produce welfare, sustainable incomes, help job creation and put faith in people in everything. With a long and prosperous history of industrial growth, there are more than 700 MSME clusters in the country. Many of those clusters lost their shine due to China’s unfair competition and discriminatory import policies. They must be supported and strengthened by all means so that they not only create opportunities for employment but also produce high-quality products at the most economical cost.
ROLE AND EFFECT ON BRANDS:
Brands in the great Indian marketplace have viewed the rise of movements national and nationalistic for years as a possibility of game-changing market action. The rise of Patanjali Ayurved, the rise of discussions that said that hand-picked, hand-made, local, old, green, organic and natural products are better than the factory-made, the chemical and the formula-run have been around for a while.
MNC-looking, and MNC-sounding brands have been scurrying lately to bring together avatars that looked local in formulation. There was no game stopping there. In came business activity not only to be local, but also to look local. So why don’t they? Over several decades these companies have been in the country and no one feels they are international brands at all. A Nescafe is as local as it is to Geneva, to Peddapalli. A Maggi noodles is more ubiquitous and local by its presence in India than it is in Switzerland.
Consequently, business action by the MNCs has been well thought out, tried and tested to date. PM Narendra Modi’s clarion call to get “Vocal for Local” is a nudge moment. Yes, there are several types of brands on the major Indian marketplace that are poised to take advantage of this PM Modi passion call. Each has clearly set their agenda.
The first type is the very brand in this country itself which started the branding movement. It is the logo of MNC, manufactured from overseas shores and sold in the Indian market. It was the start of practically any other advertised detergent, pasta, cola, coffee and more. Local factories were developed when volumes were obtained in the importing nations. It also went local, as local sourcing meant monetary benefit. The factories are local, the workers are local and they are local customers. A part of the income may likely be repatriated to the overseas holders. And this is the tiny but strong bond of international ownership. So be it, though.
The second form of brand is the Indian MNC. The major company that makes in India for India and the world, but the one that does not have the ability to repatriate a portion of its income to an overseas destination. The company that produces local produce for local people.
When the days and months pass, any one of these forms of companies will see action. While the MNC will continue to look, sound, and emit more ‘desi,’ the big and small ‘desi’ companies will continue to take advantage of the opportunity to whip up customer sentiment to their advantage.
REFERENCES:
Harish Bijoor, Self-reliant India: The bounce of vocal for local,The Indian Express,(26thMay2020AM),https://www.newindianexpress.com/opinions/2020/may/26/self-reliant-india-the-bounce-of-vocal-for-local-2147966.html
Atul Thakur, We can boycott China but at what cost?, Times of India,( Jun 20, 2020, 14:54 IST), https://timesofindia.indiatimes.com/india/we-can-boycott-china-but-at-what-cost/articleshow/76477740.cms
Dilip Bobb, Locally Vocal, Indian Legal Stories that Count, (14 July,2020), https://www.indialegallive.com/satire-articles/locally-vocal
Prabhash Ranjan, What Does Being ‘Vocal about Local’ Mean for India’s Global Trade Strategy? , The Wire, 22/MAY/2020, https://thewire.in/economy/india-global-trade-vocal-about-local
Daniel Workman, India’s Top Trading Partners, World Stop Export,( June 29, 2020 ), http://www.worldstopexports.com/indias-top-import-partners/
Tina Edwin, Boycotting Chinese products is a challenging campaign, Business Line,( June 10, 2020 ) https://www.thehindubusinessline.com/economy/boycotting-chinese-products-is-a-challenging-campaign/article31797664.ece
Arvind Mediratta, Why India needs to go vocal for local stores, The Economics Times,(May 19, 2020),https://economictimes.indiatimes.com/news/economy/policy/why-india-needs-to-go-vocal-for-local-stores/articleshow/75812730.cms
Bhavna Vij-Aurora INTERVIEWS Ashwani Mahajan, ‘Vocal-For-Local Will Stop Unfair Chinese Dumping Of Goods’,OutlookIndia,(22 May 2020), https://www.outlookindia.com/magazine/story/business-news-vocal-for-local-will-stop-unfair-chinese-dumping-of-goods/303240
Pranav Mukul, Brands, local and global, get vocal about their Indian roots,The Indian Express,(May25,20207:02:33am),https://indianexpress.com/article/cities/delhi/brands-local-and-global-get-vocal-about-their-indian-roots-6425762/
