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With the ongoing US-China conflict spilling over into the global economic terrain, India can seize the opportunity to become a leading manufacturing hub by being more competitive, focussing on technology and entering new markets, said Amitabh Kant, CEO, Niti Aayog.
“The United States President Donald Trump has changed US relations with China forever, and a lot of companies from the US and Europe will be wary of investing in China in the future.
Blessing in disguise
They will look for alternatives, and India has a massive opportunity to emerge as a manufacturing hub,” said Kant at the BusinessLine Knowledge Series webinar on ‘Vocal for Local - How to make India’s Supply Chain Truly Independent’ on Friday.
This is because India has the capability to produce export-ready goods at large scale and also provide a consumption market, he added.
The webinar, powered by BSE, was moderated by Raghavan Srinivasan, Editor, BusinessLine . “Some foreign investments have gone to Vietnam and Taiwan due to disruptions in the global supply chain, but these are small-size economies. In addition to this, the rising cost of labour in Vietnam will make them unsustainable as long-term alternatives,” said Kant.
India, on the other hand, not only has the capability to produce export ready goods in large scale but also provide a large market, he added.
Kant advised entrepreneurs to get into sunrise areas such as electric vehicles, generics and battery storage. “These are the areas that will transform India. Eight of the 10 top companies in the world are tech-driven,” he said, urging Indian businesses to give it priority.
Not anti-globalisation
On making ‘vocal for local’ a reality, Kant said Prime Minister Narendra Modi’s vision of Atmanirbhar Bharat is not about isolation or anti-globalisation. It is not to stop imports from China and start importing from other countries.
The objective is to become competitive, therefore, the focus is to make India simple in doing business, he said.
Present policy framework
The present policy framework for Production Linked Incentive Scheme and Phased Manufacturing Programme will enable India push manufacturing and has already started showing results, said the Niti Aayog CEO. For instance, leading global companies such as Apple have started production in India. Irish medical device company Medtronic, too, is now investing a major amount in India for R&D, he said.
India has attracted $38 billion of foreign direct investment during the peak of the Covid-19 crisis, Kant said, adding that despite pessimism about the pandemic, the country has been able to stay attractive.
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