Has Indian industry missed the bus completely on the ‘China-plus one’ opportunity?
As early as 2008, intelligentsia in the United States and Japan had initiated serious contemplation regarding a diversification strategy pulling away from extreme overdependence on China.
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Short-term thinking stretching over the past four decades had propelled the major nations of the world to invest highly into China lured by the low production and labour costs so offered. Apart from these, the growing size of the Chinese consumer markets too led to this concentration of capital within its extremities.
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US-China trade tensions, the pandemic and its aftermath, intense media scrutiny and noise regarding the origin of the oft-repeated ‘leak’ from the Wuhan lab with parallel unverified inputs of the virus being let loose from it’s retail markets of fresh produce, geo-political distrust reaching its pinnacle etc contributed to the China-plus One strategy emerging so forcefully. Additionally, Beijing’s Zero-COVID policy and the humungous supply chain disruptions with high lead times from China compounded adoption of this strategy for many global firms.?
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To fill this vacuum, India competed with many SE Asian countries to attract manufacturing by trying to hard-sell its supply chain resilience, ease-of-doing business, young and vibrant workforce apart from adoption of manufacturing friendly policies and supporting legislations, earmarking of trade zones, Logistics Parks, Manufacturing corridors etc.
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Make-in-India is being showcased as a major success in this initiative too with statistics being released as a supportive alibi to lend authenticity to claims. Yet, media reports suggest that niche businesses fled or flowed more easily to Vietnam, Indonesia, Thailand and closer home to Bangladesh. India despite having a mirror-image to hard sell -it’s highly populous domestic market, seems to have missed out on the opportunity to a large extent. Similarly, the hard-sell of it's vibrant democracy with seemingly stable political climate too failed to attract the numbers it rightfully should have.
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On detailed reading of the limited research and resultant inadequate literature available on the reasons for the same, not very convincing answers emerge.
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What are your thoughts as to why India missed the bus completely or if not at least, majorly in this context ?
Deputy General Manager - Projects @ Gutor
11 个月Very well articulated and thought provoking description of the chain of events and India's position in this very competitive window. One of the main reasons for lagging behind the race I think could be is the ease of doing business, setting up a manufacturing facility in India. A lot more and more needs to be done to ensure a seamless, smooth and a hurdle less environment for setting up top notch manufacturing, research and allied facilities. We have been boasting population (rather an educated population ) as our strength to attract foreign investment, the same has to be complimented by strong government support and major changes in rules/ procedures / red tapism prevalent today. I still feel we have not missed the bus, however we really need to stretch our hands to catch hold of the fast running bus.