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What can be the meaning of the new Aatm-Nirbhar initiative under the Indian Government’s recent economic announcements?

What can be the meaning of the new Aatm-Nirbhar initiative under the Indian Government’s recent economic announcements?

Wednesday June 03, 2020,

4 min Read

Amidst the recent corona crisis, the Indian government announced a package or USD266 billion to fight the crisis and boost the economy. The focus was to strengthen the Indian MSME sector and small businesses at the village level setups.

Among all the other objectives and schemes under these announcements, one initiative is particularity much talked about, and that is the Aatm-Nirbhar initiative. There are many speculations and gossips already taking rounds in business communities. I have been monitoring this particularly and found out that there are many concerns about this initiative among business persons and entrepreneurs. Few of the concerns are:

           -We are going to completely block the import of goods from countries, especially China.

           -Produce everything in our own country, be it electronics, clothing requirements, or medical equipment.

           -The most talked concern is that India is going to become China in terms of IP laws regulation.

At the first look, these all concerns look genuine. However, if we think deep, these concerns are not threatening. First things first, no country can become a completely self-dependent economy. Imports will never be blocked 100 percent. This becomes more important when the import is coming from the country with cheap pricing and in the cut-throat competition with the local manufacturing sector. For example, Indian industries import spare parts and electronic components (to be used in the end product in India) heavily from China. This is intended to be regulated and controlled to protect the local interest. However, this cannot be terminated completely as it will take a huge chunk of time for India to be productive at that level. The challenge for India is to beat the pricing and maintain the quality at the same time, to cut the export to some level. However, the import of goods such as raw components, automotive parts, electronics, and heavy machinery is not going to end at any time soon.

Now the biggest concern among businesses in India is that Indian small businesses would be on the path of violating IP laws and may become another China. It is notable that China is very infamous for exploiting the IP rights of companies from other countries. Also, it is said that the patent office in China is favorable to patent applications from local applicants. This is the reason China was able to manufacture electronics equipment and automobiles at a huge level, without having fear of any severe IP violation consequences. Industry fears that this will happen in India too as the initiative will encourage people to increase the manufacturing and in process, and they may knowingly or unknowingly violate the IP rights of respective owners.

This concern of demeaning IP regulations in the name of the Aatm-Nirbhar initiative is much discussed among the business community. However, this is not true and not going to happen in the near future. From what I see this initiative is somewhat an extension of Make in India campaign, with the emphasis of manufacturers being Indian companies. Make in India campaign already focuses on boosting the IP economy and protecting IP rights. The Indian government has separately been working on promoting patent filings and increasing awareness for IP rights and processes in India. This won't be faded in the recent Aatm-Nirbhar initiative.

In the past, it has been seen that manufacturing big scale products without caring for IP products didn't go well for Indian companies. A few years ago, a bubble of Indian smartphone manufacturers surfaced and gained momentary success in the market. Most of the brands had blatantly violated the IP rights of other telecom companies. Eventually, almost all the brands faded away as the rival competitors started filing patents in Indian. Indian manufacturers could not keep up with innovation.

Keeping in considering the recent boom in Indian patent filing trends and cheap cost to obtain the patent in India, it is very less likely that IP rights would not be cared for in the country. Indian manufacturers need to adopt the concept of innovation in their productions and IP trends are nothing but a reflection of the innovation adopted by the industries. From where I see, the trend looks good.