Sentiments between India and China are already becoming bitter post the border dispute. Besides, the Indian government is developing strategies for self-reliance. Embracing local products and boycotting Chinese products is an essential component of the strategy. Replacing Chinese imports with Indian brands will gradually make India a global manufacturing hub. India is all set to demolish China as the lead manufacturer in the post-COVID-10 world.
Due to the coronavirus, the world has suddenly awoken to the hegemony and reality of China. In the global economy, China was the irreplaceable fulcrum. And it uses it as a leverage for incompetent power. However, COVID-19 is going to change a lot of things. Amongst this is going to be the way the world does business. China was the economic superpower for three decades. Its policy of offering efficient labor and products at a low cost allowed it to gain authoritarian control over the world economy. However, Chinese hegemony is exposed now, and things are going to change a lot.
Monopoly Of China On Supply Chains
China monopolized the supply chains. Multinational companies are always looking for low production costs. On the other hand, western governments allow outsourcing of industrial and manufacturing capabilities. These opportunities allowed China to exploit supply chains globally. Until the infectious virus hit us, the world turned a blind eye to China. This allowed China to become the world’s factory and strengthened its manufacturing powers.
China simultaneously develops a complicated net of supply chains internally. However, interoperability makes relocation difficult. And this is the reason why the world becomes ever more reliant on China. This reliance allows China to become an economic superpower and monopolize the supply chains. China was the largest supplier of components and goods amongst all sectors. Starting from technology to consumer goods, competing with China was practically impossible.
India As A Global Manufacturing Hub Amidst Bitter Sentiments
COVID-19 has a massive impact on the globalization process. It makes the nations rethink their trading policies with China. The bitter sentiments even became stronger when China supplies fake “test kit” to India, along with many others. Several Indian brands like Ola, Paytm, Byju’s, and Big Basket are extremely dependent on Chinese finance. However, things are about to change, and despite this dependency, India can still manage to survive on its own.
It is a difficult challenge to create an alternative source for manufacturing. But significant small steps towards the goal can make the task easier. India’s project “Atmanirbhar Bharat” can allow it to become self-reliant. There are also “Make In India” schemes that promote Indian products. These schemes will soon replace low-cost Chinese goods. Besides, it will allow local goods to flourish at a lower price. The announcement of Rs. 20 lakh crore for reboot and relief economy is a huge support. This will allow small businesses to get some concessions in their taxation policies.
The package also acts as an incentive for domestic manufacturing products. It intends on helping the MSMEs as they will get collateral-free assistance of Rs. 3 lakh crore. Most of the consumer goods in the nation are either made in China or get their components from there. China was one of the biggest retailers in the world. But the situation changes ever since the US ports denies the entry of Chinese shipments. The problems for China can be a massive achievement for India. If India plans on investing in the sector of food processing, then it can make China move out. Moreover, experts believe that easing out the constraints on supply and reviving the demand can heal the global economy.
Opportunities For India In Agriculture And Electronics
The downfall of China paves the way for tremendous opportunities in India. The nation can succeed in grabbing opportunities in both the electronics and agriculture sector. This includes the export base as well. The Chinese smartphone market becomes the second-largest smartphone market in the world. It even surpasses the US smartphone market with a growth of 7%. As per ICEA, electronic exports of India remains flat at $5 billion.
However, the country is coming up with a new scheme of Rs. 48,000 crore. This will promote the manufacturing of electronics in India, making it an alternative for China. Moreover, several manufacturing facilities have been given to Indian electronic companies. Apple is thinking of producing a $40 billion smartphone in India. They are planning to shift their base from china as this will grant them “production-linked incentives (PLIs)”.
“Atmanirbhar Bharat” will help in the agricultural sector as well. It will provide incentives for building cold chains. Also, it will facilitate management infrastructure post-harvesting. A legal framework setup will allow farmers to engage with large retailers and processors. India is a significant exporter of meat, rice, milk products, honey, tea, and several others. The trade restrictions on Chinese products will allow India to seize the opportunity and export more. The “Essential Commodities Act” will enable the farmers to have better prices for their agricultural products.
India As A Global Manufacturing Hub, Replacing Chinese Items
The reforms in liberalization enable India to become dominant. India can surpass the Chinese market in terms of drugs, computers, solar energy, telephones, electric vehicles, and organic chemicals. The incapacity of India to manufacture certain goods makes it a large importer. However, the relocation of large companies from China to India depends on its manufacturing capacity. E-rickshaws and electric two-wheelers get their batteries imported from China. These require lithium-ion batteries to run.
However, companies like Suzuki invests in lithium-ion batteries. These are worth Rs 5000 crore. China has the benefit of monopoly in these batteries. However, India should not worry about the supply. India has successfully convinced Suzuki to establish a base in Gujrat. India also has plans for convincing Hyundai, Panasonic, and LG Chem. It is trying to find ways to get investment plans for lithium-ion batteries.
Boycotting Chinese products is a way of protecting civilization’s heritage and geographical integrity. However, it also enhances India’s economic status. Narendra Modi emphasizes self-reliance, but it does not necessarily mean going into an internal shell. But it means thinking globally but acting locally.