Self-sufficient India – a myth
Self-sufficiency is a utopian ideal, in a highly integrated world. There is no country that is self-sufficient. And chasing self-sufficiency is meaningless, as countries have to ensure the availability of resources in the best possible ways.
What the country has to do is to identify the areas where we can go for a push and make them globally competitive. And where ever import substitution makes sense, we need not shy away from going ahead.
Japan, one of the most prosperous countries in the world imports almost 90 percent of its raw materials. They are called ‘apprentice turned masters’, an economy that revived after being devastated in the Second World War.
The USA is what it is today, simply because it has attracted global talent. It is the global talent they attracted that made them a trillion economy.
China, which was a poor economy till the late seventies, opened up its economy in 1978 and attracted foreign capital. Their transition to becoming the second biggest economy in the world was triggered by the capital flight to that country.
Hence, what we have to aim for is to make the means of production competitive and dismantle all hurdles. Let us invite foreign as well as domestic capital in productive sectors; make the labor force more skilled; make tax laws more predictable. The transformation will follow.
The clarion call for self-reliance, protectionism, etc. is old hyper nationalistic ideas. It’s not worth pursuing them. And they may take us back by centuries.