Every Country Now Wants to be Atmanirbhar. How Can you Participate in this trend?

Industrial policy refers to government officials channelling resources to particular industries that the market would not. What India’s leaders understood many decades ago was acknowledged a fortnight ago by the World Bank – that every country should now have an industrial policy. Companies in our Global Compounders Portfolio are well positioned to potentially benefit from this thanks to their critical positions in tech, AI, power, defence and biotech supply chains.

Source: World Bank

In 1993 the World Bank published a famous report which said that developing economies should focus on getting the basic things required for a functioning free market economy in place e.g. healthcare, law & order, education, etc and then step out of the way. Specifically, the World Bank instructed developing economies to not do anything which jeopardised macroeconomic stability (such as running big budget deficits on the back of heavy subsidies). “The state’s role, where acknowledged at all, was cast as facilitative rather than directive — getting the basics right and then stepping back.”

33 years on from that highly influential report, the World Bank changed its position by 180 degrees. On 17^th March 2026, the World Bank published a 276-page report which acknowledged what the Indians and the Chinese have known for decades i.e. “…. governments around the world are increasingly turning to a once controversial policy. Industrial policy—the range of policy tools governments use to shape what an economy produces, rather than leaving it to markets alone—is back with a vengeance.

Contrary to recent headlines, advanced economies are not the heaviest users of industrial policy. As this report documents, developing economies use it more intensively. New data show that total business subsidies among upper-middle-income economies now average 4.2 percent of GDP—the highest on record. Middle-income economies have higher average import tariffs and more dispersion of tariffs across individual products compared to high-income economies—evidence of stronger targeted protection of certain industries. A review of the latest national development plans across 183 economies finds that low-income economies target growth in 13 industries on average, more than twice the number in high-income economies.”

With the World Bank now blessing the use of industrial parks, production subsidies, demand subsidies, tax incentives, tariffs, exchange rate devaluation, etc to boost industrial production, across the world we may see increased adoption of approaches similar to those used in India:

• Mobile phones i.e. give firms like Apple a Production Linked Incentive equivalent to 5% of its incremental sales of goods manufactured in India.
• Chip manufacturing i.e. give firms like Micron subsidies equivalent to 70% of its production costs.
• Datacentres in Andhra built by hyperscale’s like Alphabet and Microsoft i.e. heavily subsidised land, power at a subsidised rate of Rs 1/unit, 25% subsidy on water, 100% reimbursement of Net SGST and a 25 year long holiday from paying corporate tax.