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Swawalambika is based on principle of swadeshi. Swadeshi is made or produced in the village/community must be used first and foremost by the members of the village or local community. Trading among villages/community and between villages and towns should be minimal, like icing on the cake. Swadeshi avoids economic dependence on external market forces that could make the village community vulnerable. It also avoids unnecessary, unhealthy, wasteful, and therefore environmentally destructive transportation. The community must build a strong economic base to satisfy most of its needs, and all members of the community should give priority to local goods and services.

By adopting the principle of production by the masses, communities would be able to restore dignity to the work done by human hands. There is an intrinsic value in anything we do with our hands, and in handing over work to machines we lose not only the material benefits but also the spiritual benefits, for work by hand brings with it a mediative mind and self-fulfillment.

Mahatma Gandhi wrote, "Its a tragedy of the first magnitude that millions of people have ceased to use their hands as hands. Nature has bestowed upon us this great gift which is our hands. If the craze for machinery methods continues, it is highly likely that a time will come when we shall be so incapacitated and weak that we shall begin to curse ourselves for having forgotten the use of the living machines given to us by God. Millions cannot keep fit by games and athletics and why should they exchange the useful productive hardy occupations for the useless, unproductive and expensive sports and games." Mass production is only concerned with the product, whereas production by the masses is concerned with the product, the producers, and the process.

The driving force behind mass production is a cult of the individual. What motive can there be for the expansion of the economy on a global scale, other than the desire for personal and corporate profit?

In contrast, a locally based economy enhances community spirit, community relationships, and community well-being. Such an economy encourages mutual aid. Members of the community take care of themselves, their families, their neighbors, their animals, lands, forestry, and all the natural resources for the benefit of present and future generations.

Gandhi knew that with the globalization of the economy, every nation would wish to export more and import less to keep the balance of payments in its favour. There would be perpetual economic crisis, perpetual unemployment, and perpetually discontented, disgruntled human beings.

Swadeshi is the way to comprehensive peace: peace with oneself, peace between peoples, and peace with nature. The global economy drives people toward high performance, high achievement, and high ambition for materialistic success. This results in stress, loss of meaning, loss of inner peace, loss of space for personal and family relationships, and loss of spiritual life. Gandhi realized that in the past, life in India was not only prosperous but also conducive to philosophical and spiritual development. Swadeshi for Gandhi was the spiritual imperative & it is swawalambika.