Amidst global economic turbulence caused by the COVID-19 pandemic, the Government of India announced a new campaign. Aimed at fostering self-reliance in the country and saving the economy from plunging further, the campaign called out to the citizens to be ‘Vocal for Local’.
The campaign highlights building the potential of local manufacturers so that their products can compete at global levels. Furthering the impact of ‘Atmanirbhar Bharat’ the government also introduced the Production Linked Incentive (PLI) Scheme in ten sectors. The opportunity and benefits of Vocal for Local and its projected impact had an instant appeal on the MSME manufacturing sector.
The manufacturing industry in India received a breath of fresh air with the "Make in India'' program announced in September 2014. The idea behind the initiative was to create an attractive environment with incentives such as tax breaks and land grants. The benefit was two-fold. While attracting investment from foreign investors, it would also help in the optimal utilization of the country's human capital. The Vocal for Local campaign has taken the strategy one step further by reducing reliance on global investors. It is a call to action for Indian investors, entrepreneurs, and workers to reduce dependence on imports and deliver globally competitive products.
India has a huge opportunity to boost its economy through the MSME manufacturing sector. Generating over 5.95 lakh jobs, the MSME sector contributes around 29% to the GDP. With Vocal for Local, the MSME sector has a unique opportunity to play an important role in India's development. MSMEs can leverage their ability to promote industrialization locally and even in rural areas. They can also contribute significantly with their ability to run on low capital and low reliance on advanced technology. Utilizing traditional skills, MSME manufacturers can create a unique value proposition for local and handmade products.
The path to success of the Vocal for Local campaign is bumpy but not impossible to navigate. Roadblocks such as lack of funds, delayed approvals, and limited access to technology can delay the progress. Inadequate financial assistance is a major challenge for the small and medium enterprise sector. Manufacturers struggle to clear current debts and seek better funding options to expand their operations. The tedious long-winding approval processes make it difficult for businesses to operate. The government can help MSMEs by facilitating access to financial services on easier terms. Regulatory compliances as of the Companies Act of 2013 for MSMEs may also be relieved to boost external funding for the sector.
For the success of the Vocal for Local initiative, it is imperative to identify labor issues at the grassroots level and address them so that each member of the ecosystem benefits. Business owners also need assistance with concerns like limited internet literacy and marketing capabilities. These pose significant challenges in attracting new customers even if their products are at par with global standards. Furthermore, the incompetent R&D system in the MSME manufacturing sector needs strengthening if the country's enterprises are willing to be more competitive internationally. Accepting and addressing these challenges can smoothen the road for our homegrown brands to compete in the global markets.