Survey flags India Inc's 'lack of investment appetite', says Swadeshi 'inevitable', Pg15

Key Highlights:

• The Economic Survey 2025-26 advocates for Swadeshi, citing global trade challenges like export controls and technology denial.
• It criticizes Indian corporates for a "lack of appetite" in long-term risk absorption and global competitiveness.
• The Survey suggests Indian corporate investment is characterized by low R&D intensity.
• It emphasizes that Swadeshi is both a defensive and offensive policy for ensuring production continuity and building national capabilities.

Detailed Insights:

• The Survey argues that the global trading environment necessitates Swadeshi to ensure production continuity amidst external shocks and to build national capabilities.
• It points out that Indian corporates often prioritize regulatory arbitrage and protected margins over productivity enhancement.
• The Survey suggests that the corporate sector's tendency to externalize risk to the state hinders the development of higher state capacity.
• It draws parallels with post-war America, Germany, Japan, and East Asia, where firms contributed to nation-building and strengthened national resilience.
• The Survey highlights that Swadeshi-oriented policies should balance manufacturing and imports to avoid complacency and inefficiency.
• It notes that corporate investment in India is often concentrated in real estate-linked, regulated, or quasi-monopolistic sectors.
• The Survey stresses the importance of corporate culture transformation, urging business leaders to see themselves as trustees of a larger developmental project.

Key Concepts Involved:

• Swadeshi: A policy that promotes domestic production and consumption, aiming to achieve economic self-reliance.
• Regulatory Arbitrage: Exploiting differences in regulations to gain an advantage.
• R&D Intensity: The level of investment in research and development activities.