Make in India - Different Times Different Advocacy

I raised the FTA (Free Trade Agreement) issue long back in an article dated 17th June 2017. The extracts from this article is reproduced under.

Implication 3 – Might not prevent imports of mobile phones at “zero duty” from the FTA nations like Vietnam and ASEAN nations - will result in arbitrage, i.e companies operating in non-FTA nations might route imports into India from these FTA nations.

Today (9th Dec 2019), ET has published an article stating exactly the same. The Headline - Mobile Cos Seek Review of Duty on Parts as Imports from Vietnam Soar. See under.

The dichotomy is that the same associations who is now currently pushing for abolishing of duties was earlier supporting it. Why? Has the interests of member companies changed? Probably yes (Indian Manufactures/traders have vanished from the seen). Else why would anyone change his position so quickly, when we all knew the risk of supporting such policies?

The Solution

As stated in my article earlier - the current policy of imposition duties on mobile phones and parts was never a sustainable option, as it did not address the key issue - "improving the cost structure of making phone in India", and also it does not provides any incentives to companies add more value than their counterparts (see option suggested in my article). Therefore, the investments by companies making phones in India is low and also it did not help in containing the outflow of saving precious foreign exchange - the key metric to evaluate success of make in India. Now, the question is when will we learn to focus on right policies in order to drive the incentives of companies to do the right thing? As then only we can drive the true benefit of make in India, i.e Investments, Saving precious Foreign Exchange, and Creation of High Quality Jobs.

(Views expressed are of my own and do not reflect that of my employer)

PS: Find the list of other relevant articles in the embedded link.