OPINION | Swadeshi Economics: India’s third way beyond western models

Indian economic problems continue to be viewed through a Western lens

As 2025 draws to a close, it is an opportune moment to reflect on the debates and developments related to India’s own economic imagination—going beyond growth numbers and policy announcements.

Two significant developments in 2025 deserve attention. One relates to the global economic order, while the other has emanated from within India. The first is the upheaval caused by the United States’ global tariff war, and the second is the alarming level of air pollution witnessed across several parts of the country during winter.

Third Way

At first glance, these developments may not appear interconnected. Yet, both point in the same direction: the need to move beyond the dominant ‘capitalist’ and ‘Marxist’ economic models and explore a ‘Third Way’ rooted in Swadeshi Economics. Such a framework offers India an indigenous development model—one that can insulate the country from global economic shocks while ensuring growth that is sustainable and ecologically balanced.

What India faces today is largely the outcome of choices made in the past, particularly before 2014. RSS stalwart Dattopant Thengadi had begun advocating the revival of Swadeshi Economics and the ‘Third Way’ as early as the 1960s, at a time when policymakers—trained in Western universities—were determined to transplant foreign economic frameworks onto Indian realities. ‘Swadeshi’ was mischievously equated with an inward-looking, regressive outlook, and terms like the ‘Hindu rate of growth’ were coined to mock India’s economic progress.

Thengadi systematically exposed the fallacies of foreign economic models and highlighted their incompatibility with India’s socio-cultural framework, rooted in an uninterrupted civilisational journey spanning millennia. In his seminal work Third Way, he wrote:

“There (in the developed countries of the Western world) the goal was happiness for oneself; here it was happiness for all. It was a case of acquisitiveness vs aparigraha (non-possession); profit motive vs service motive; consumerism vs restrained consumption; exploitation vs antyodaya (unto the last); rights-oriented consciousness of others’ duties vs duty-oriented consciousness of others’ rights; the rape of nature vs the milking of nature; and constant conflict between an individual, society, and nature vs complete harmony between them.”

RSS Resolutions

Between 1990 and 2000, the RSS passed a series of resolutions emphasising the need for Swadeshi Economics. In 1994, its highest decision-making body, the Akhil Bharatiya Pratinidhi Sabha (ABPS), declared:

“The vow of Swadeshi and intense nationalism alone can provide self-reliance and self-respect to the country. India carried on its struggle for independence against foreign domination on the basis of these lofty ideals. The enormous latent energies of the people will certainly get roused when this goal is pursued.”

A year later, in 1995, another resolution stated: “It is evident that there is no alternative to Swadeshi and nationalism to successfully meet this challenge. Only the lifestyle and economic policies rooted in the heritage and values of this ancient nation can ensure self-reliance, prosperity, and independence.”

In 1996, the RSS further emphasised: “Our patriotic people have to further intensify and accelerate the Swadeshi movement in order to frustrate all such evil designs and save our national security and sovereignty.”

By 1997, the RSS had termed the struggle to protect India’s economic sovereignty a ‘second war of independence’.

However, from 1947 to 2014, the idea of protecting sovereignty through Swadeshi largely remained rhetorical—except during the brief tenure of the Vajpayee government (1998–2003).

Swadeshi in the Modi Era

Post-2014, the Modi government revived the idea of Swadeshi, taking it out of academic debate and translating it into policy through initiatives such as Atmanirbhar Bharat, Make in India, and Vocal for Local. Prime Minister Narendra Modi reiterated this approach in his Independence Day address this year:

“Self-reliance is not confined merely to imports and exports, or to rupees, pounds, and dollars. Its meaning is not so limited. Self-reliance is linked to our capability, and when self-reliance begins to diminish, capability too continually declines. Therefore, to preserve, maintain, and enhance our capability, it is imperative to be self-reliant.”

Challenge of the Western Lens

While the intent of the Modi government has been to promote Swadeshi Economics, a major challenge remains: Indian economic problems continue to be viewed through a Western lens, shaped by how economics is taught in the country.

India has always possessed a rich academic tradition of economic thought spanning thousands of years—far beyond the Arthashastra. Just as Indians excelled in mathematics, astronomy, and Ayurveda, they also developed sophisticated economic models capable of offering an enduring economic order. Yet, from school to postgraduate education, economics remains overwhelmingly rooted in Western theories.

This concern was articulated powerfully in 1960 by Professor Joan Robinson, one of the most influential economists of the 20th century, in her paper Teaching Economics. She wrote:

“For many years I have been employed as a teacher of theoretical economics; I would like to believe that I earn my living honestly, but I often have doubts. I am concerned particularly for India and other developing countries whose economic doctrines come to them mainly from England and in English. Is what we are giving them helpful to their development?”

She added: “In Cambridge, one or two of our best men, in most years, come from the subcontinent… These good men who come to us to be taught… go home often to teach in their turn… We have a great responsibility on our shoulders. Are we doing more harm or good?”

Underlining the damage caused by such an approach, Robinson observed: “Most students, of course, approach their studies merely with the aim of passing an examination and acquiring a degree… of repeating the particular formula which sounds as though it was relevant to each particular question.”

She then spoke specifically of India: “In India especially, where the ancient belief in the power of words as such is still strong, this comes quite naturally… And so, the system feeds on itself.”

Earlier Sanghnomics columns can be read here.

(Arun Anand has authored two books on the RSS. His X handle is @ArunAnandLive.)

Views are personal, and do not represent the stance of this publication.