India today is, unmistakably, a services-driven economy. As per the Economic Survey and recent government releases, the services sector (tertiary) now contributes around 55% of Gross Value Added (GVA) in India. The sector also accounts for roughly 30% of India’s workforce as per ILO and World Bank estimates. In short, India’s growth engine is powered by services, not agriculture or low-end manufacturing.
Yet over the decades, India has long aspired to emulate the manufacturing-led growth path of others, most notably China. Be it through import substitution in earlier decades, the ‘Make in India’ push since 2014, or the more recent Production Linked Incentive (PLI) schemes, successive governments have sought to build a strong domestic manufacturing base.
In the past decade, especially, this thrust toward manufacturing has been reinforced by shifting geopolitical winds. The COVID-19 pandemic exposed fragilities in global supply chains. Overreliance on dominant economies, be it China for inputs, or the U.S. for markets, proved a risky bet. The emergence of inward-looking policies abroad (e.g. America First, trade wars, sanctions) eroded trust in global interdependence.
Many nations responded by pivoting inward, emphasizing strategic autonomy and self-reliance. For India’s 1.4 billion population with 65% working age population and its $4 trillion economy growing at a steady rate of 6-7%, this inward turn is a natural inclination. The resurgence of swadeshi sentiment, the push to galvanize MSMEs (micro, small and medium enterprises) into manufacturing, and campaigns encouraging citizens to preferentially consume Indian goods, all epitomize this shift.
In that sense, the idea of Atmanirbhar Bharat is appealing: local resilience in the face of global volatility. Indeed, crafting buffers against external shocks, ensuring supply chain security, and developing critical capacities (e.g. in pharmaceuticals, electronics, defence) are legitimate strategic imperatives. Atmanirbhar Bharat is an essential cushion. It is about safeguarding sovereignty and building robustness in a world of flux.
But herein lies the risk: conflating the pursuit of self-reliance with the goal of achieving Viksit Bharat by 2047. Counting on Atmanirbhar Bharat alone to deliver Viksit Bharat is akin to taking a steroid now and expecting lifelong vitality. The two must be decoupled in strategy and mindset.
Why? Because self-reliance and development demand different emphases. One, self-reliance may justify protective policies, gradual import substitution, and moderate shielding of infant industries. But such measures, if extended indefinitely, dampen competition, stifle innovation, and breed inefficiencies.
Two, development demands constant disruption: productivity leaps, technological upgrading, global competitiveness, exports, and integration in global value chains. A Viksit Bharat must not just survive internally but it needs to win externally. An Indian firm that competes only in the protected domestic market will neither aspire to world-class benchmarks nor scale to the global stage. Innovation thrives under pressure, not in cocooned shelter.
To become Viksit, India needs entrepreneurs who design globally, invest in R&D, scale across borders, and compete with the best. Thus, while the government must continue to push both short-term resilience (Atmanirbharta, swadeshi) and long-term vision (Viksit), it is critical to distinguish the two and align policy instruments accordingly. It needs to make a few careful choices.
First is between the strategic shield and openness frontier. For sectors essential to national security (defence, critical electronics, strategic drug supply), a guarded development path may be warranted. But for sectors with export potential or scale economies (auto, pharmaceuticals, renewable energy, artificial intelligence), the gates must open. India must invite competition, inward investment, and global standards.
Second is between time-bound protection and permanent cocooning. Any protection or incentives should be transitional, with clear sunset clauses and tied to performance. If domestic firms can’t stand on their own after a few years, protection merely delays correction.
Third is between catalyzing innovation and productivity rather than just capacity. Instead of subsidies for scale alone, incentives must reward productivity enhancements, process innovation, adoption of advanced manufacturing (Industry 4.0), sustainable practices, and efficiency. The next frontier is about quality, not just quantity.
Fourth is the global outlook built into industrial strategy. Policymaking should force Indian firms to benchmark internationally. This is achievable through export targets, foreign collaborations, joint ventures, licensing, etc. Programs like PLI should not just push volume but encourage linkages to global supply chains.
Fifth, support deeper services-manufacturing convergence. The government should exploit servicification. It should strive towards embedding high-value services: software, design, analytics, after-sales, digital twins, R&D into manufacturing. That is the intersection where India can leapfrog.
Lastly, flexible and dynamic industrial clusters. Rather than rigid sectoral silos, clusters must evolve. Integrating manufacturing, logistics, digital platforms, design, skill hubs is the need of the day. These must not be defense zones, but open ecosystems.
Decoupling Atmanirbhar Bharat from Viksit Bharat doesn’t mean rejecting self-reliance. It means treating it as a strategic foundation, not a full destination. Atmanirbharta is the guardrail; Viksit is the highway. To become Viksit by 2047, India must think not in isolation but in interdependence with global standards, continuous innovation, fierce competitiveness, and scalable exports. Policymakers, entrepreneurs, and civil society must internalize that self-reliance without ambition may lead to mediocrity rather than greatness.
Our task today is to build resilience and ambition. This will make India in 2047 not just self-reliant but a globally leading economy.
Lakshit Mittal was President, ISB Student Board and is a member, National Policy Research Team, BJYM
