Elephant to Tiger (Part -I)

The Flight of the Dragon:

Both India & China started their journey almost at the same time i.e. around 1950 and they drafted their course differently. China overlooked democracy and became an economic powerhouse in almost 75 years where as India chose to be a robust democracy at the cost of development. Not debating which choice is better over other. However in its approach India has mostly behaved like a giant Elephant i.e. trying to stay together, accomodate differences, make international relations that can last longer and are not transactional. Where as China had focus on growth and development, making fewer but strategic alliances. The latest development between India & China has led to a very vocal call in India about Boycot Chinese products. Lets understand how we have reached the current stage and why just the call wont make any difference. We need to make this transition in a way where we can make it a sustainable journey and it has to be done in a time bound manner. Therefore I believe, India has to change its mindset from being an Elephant to being a Tiger.

In the 21st century, China has swiftly evolved into one of the significant economies of the world. They have managed to take over the manufacturing industry with numerous countries outsourcing or importing goods from China. The nation itself may not be a consumer-driven economy, but their dominance over global export has worked wonders for them. Their well-devised strategy to gain a stronghold over underdeveloped nations by providing financial support and later leveraging their increasing debt is lately more evident. From a global superpower like the USA to a developing economy like India, countries have become more reliant on China for manufacturing various products. Many of the prime electronics companies are situated in China, with a wide user base all across the world. This just shows the extent of dependency on a particular country, the international market has succumbed to.

So, to go on to declare boycotting China or Chinese products is very non-pragmatic. Their influence over the global economy has matured drastically and eliminating that would have unprecedented repercussions on most major nations. There are a lot of economic, technical and industrial factors that need consideration before profusely trying to eliminate goods from any specific country. Many Chinese companies have set up their manufacturing plant in India to abide by the concept of Make in India. If products of these companies are banned/boycotted, millions of people may lose their jobs that are directly or indirectly employed by these companies. Unless valid alternatives are provided to consumers and the government alike, there is little to no point in entering a trade war with China.

China has always had a monopoly over the manufacturing industry and much of it is due to so called tyrannical laws laid down by the communist party. The escalation in international and internal geopolitical situations within the country has tipped the saturation point of their citizens as well. This has led to an increasing number of protests and revolts against the unethical laws of the PRC. Hence, it was crucial for China to have a comparatively lower number of COVID cases. Be it through sheer fate, illiberal medical treatments or information manipulation, they were able to achieve that. However, the amalgamation of such situations has now forced international companies to consider shifting their operations from China to another affordable nation. Logically and strategically, India is supposed to be the next choice for the companies. With benefits like affordable land, cheaper manpower, and a plethora of resources, India can ensure better growth and development of many companies, to encourage them to have their base of operations or an alternate base, in India. As per a Bloomberg report, India is even developing a land reserve that is almost twice the size of Luxembourg, so as to allure international enterprises including almost 1000 American companies to set up their business over here. Yet, many still disregard India as a viable option as one of their major business centres.

Apart from the severe business policies, even the central and state labour laws are painstakingly cumbersome. These issues are just the tip of the iceberg, as the reluctance of companies investing in India also has to do with massive taxations, incessant regulation changes, subpar infrastructure, and internal corruption, which are just a few of the many issues that await investing companies.

A recent analytical assessment study entitled ‘Amendments in Labour Laws and Other Labour Reform Initiatives Undertaken by State Governments of Rajasthan, Andhra Pradesh, Haryana and U.P.’ (NLI Research Studies Series No. 122/2017) stated that “On their own strength, these amendments in labour laws have neither succeeded in attracting big investments, boost to industrialization or to job creation nor have these amendments singularly resulted in enhancing exploitation of labour and deterioration of service and working conditions of the working population.” There is no use of such labour laws if they are unable to fulfil either of the requirements.

India needs to act and 'act smart' if they want to convert this current situation to their advanatge (to be continued...)

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