Atmanirbhar Bharat

2020 Economic Stimulus

On 12-May-2020, the Union of India announced a series of stimulus measures under the Atmanirbhar Bharat banner, totalling ₹2,097,053 crore (equivalent to ₹27 trillion or US$280 billion in 2026), about 10% of India's GDP. The measures included changes to the legal definition of micro, small, and medium enterprises (MSMEs), increased foreign direct investment limits in defence, and credit and liquidity support for stressed sectors.

Economists who examined the composition of the headline figure found that only a small fraction represented new government spending. An analysis noted that the Reserve Bank of India's own liquidity injection measures amounted to approximately ₹8 lakh crore (equivalent to ₹10 trillion or US$110 billion in 2026), and that direct fiscal spending amounted to only around one percent of GDP instead of 10 percent implied by the headline figure. The remainder consisted of credit guarantees and other contingent liabilities rather than direct expenditure.

Calls to Boycott Chinese Goods

Alongside the coronavirus pandemic, Atmanirbhar Bharat Abhiyan could be seen in the context of India-China relations and India's economic dependence on China in some sectors. There were calls to boycott Chinese products and promote domestic firms following the Galwan Valley skirmish on 15-June-2020, which resulted in several deaths. The Swadeshi Jagaran Manch, an affiliate of the Rashtriya Swayamsevak Sangh, said that if the government is serious about making India self-reliant, it should not award contracts to Chinese companies in infrastructure projects such as the Delhi–Meerut Regional Rapid Transit System. A Chinese company was awarded a contract for 5.6 km (3.5 miles) of the project.

Implementation

Defence Sector

Defence manufacturing has been a significant focus of the initiative. The Ministry of Defence introduced the Defence Production and Export Promotion Policy and the Defence Acquisition Procedure in 2020, allowing private firms to hold majority stakes in joint ventures with public-sector organizations and to export up to 25 percent of output.

In August-2020, Defence Minister Rajnath Singh announced the Defence Ministry was "now ready for a big push to the Atmanirbhar Bharat initiative" by imposing import prohibitions on 101 military items in a staged manner over five years. In the following months, more positive indigenisation lists and negative import lists were released. The new legislation was portrayed as an initiative towards increasing India's self-reliance. A new category of procurement, Indian Indigenously Designed, Developed, and Manufactured (Indian-IDDM), was created. Reform of the Ordnance Factory Board and giving the new defence public sector undertaking units large-scale orders was a move towards military self-reliance. Equipment manufactured under Indian-IDDM has been handed over to the military. In the fiscal year 2022, the Ministry of Defence decided to spend 65% of its capital budget on domestic procurement. Increased self-reliance is also being seen in the construction of its warships and submarines.

Reception

The initiative received mixed responses, with supporters pointing to rapid domestic scaling in critical sectors such as personal protective equipment, pharmaceuticals, vaccines, and personal hygiene products needed to address the pandemic effectively. Swaminathan Aiyar, writing for The Economic Times, said in the 1960s and 1970s, India's drive for self-sufficiency was unsuccessful, and doing the same thing again was not advisable. Arvind Panagariya has criticised self-sufficiency and protectionist policies in favour of free trade in the context of India's past. Sadanand Dhume was sceptical of the terminology and language around the phrase, and whether it was meant to revive pre-liberalization-era policies. "Aatmanirbharta" or "Self-Reliance" was the Oxford Hindi Word of the Year in 2020.

In June-2020, India's Finance Minister Nirmala Sitharaman said "at least don't buy Ganesha idols from China" after commenting on India's over-reliance on 'non-essential' Chinese imports. Atmanirbhar Bharat has been called a re-packaged version or revival of the Make in India movement, using new slogans such as "Vocal for Local". The policy has also been called "economic nationalism". The phrase has been used so extensively that it has become "India's overarching national policy for growth and development". Unfinished reforms in the Atmanirbhar Bharat agenda span governance, urban, and civil service reform. Commenting on the program, the Economist Intelligence Unit stated, "Modi's policies aim to reduce domestic market access to imports, but at the same time open the economy and export to the rest of the world."

Opposition politicians have argued that self reliance is not a new idea, pointing to public-sector companies built in the decades after independence— the Steel Authority of India, the Defence Research and Development Organisation, Hindustan Aeronautics Limited, Central Coalfields, National Thermal Power Corporation, and GAIL India Limited, and academic and research institutions, including the Indian Institutes of Technology, All India Institutes of Medical Sciences, and the Indian Space Research Organisation. Some have also argued that Atmanirbhar Bharat is political messaging with no economic impact.