Modern businesses should aim for the best of local and global
Government wants Indians to buy local. It says that it will help the economy grow.As per CII 88% of components for mobiles come from China. David Ricardo would feel bad.
Deepak Shenoy is founder of Capital Mind, a financial services company. He shared what type of ‘local’ should benefit India. One, India should repatriate gold from abroad to India. Two, we should buy defense equipment from Indian companies. It will create jobs and security. Three, by not offering subsidies to exports, Indians can buy world class products at home. Four, reasonable rates for post office deposits, state banks and corporate debt.
Deepak wrote, “We hate our own companies. Reliance is a bad boy. But Amazon is good. Why? This is really not necessary — Reliance has stood up to everyone and yet, they are called nasty names. There should be official praise of the local folks, if you want us to get local.”
Going local will inhibit trade, which will make the businesses worse off than before. Economist David Ricardo had written how businesses should focus on comparative advantages, and not going local. Issues which harm manufacturing in India are lack of flexibility in labour laws, high costs and low availability of land and high cost of electricity.