This shows how far an average Indian is from an average Chinese or United States.
That is why economists repeat that India has to grow rapidly for several decades at a stretch if it wants the average level of lifestyle to reach anywhere close to the developed world.
We continuously need to increase our manufacturing sector.
BUT INDIA’S DEPENDENCE ON CHINA
Contrary to perception, India imports a lot of intermediate goods from Mainland China, and stopping that trade will affect our ability to produce finished goods.
There are sectors that are import dependent such as automobile, pharmaceuticals, electronics, telecommunications, etc.
Thus move towards boycotting these goods could be counter-productive, impacting the overall competitiveness of the Indian manufacturing sector and undermining our competitiveness to export.
But does that means India should resign to becoming a “slave” to Chinese imports? Ofcourse the answer is “No”. But, the path to overcoming our dependence on Chinese imports or for that matter, imports of any other nation,
Requires Indian policymakers and businesses to put in real hard work and not resort to lazy solutions such as banning trade or raising tariff on goods.
REASON FOR INDIA’S POOR SHARE IN GLOBAL TRADE?
The first thing to understand is that India’s poor quota in global trade, especially on goods, is a reflection of our acute lack of competitiveness.
This is the harsh truth but far too often, instead of accepting this reality, policymakers have blamed India stagnant exports performance on weak global demand during pandemic.
WHAT ARE DOMESTIC BOTTLENECKS?
Low infrastructure, Lack of reliable electricity, Logistical delays, Regulatory hurdles, Problems in enforcing contracts etc are create loopholes.
HOW TO REDUCE THE COST OF MANUFACTURING?
We need to be more sector-specific and
Focus on factors of production that can make a meaningful difference. For example,
India’s desire to revive textile exports can be helped by increasing productivity in cotton plantations (by better implementing available technology, like BT Cotton).
Trade negotiations bilateral, multilateral to lower tariffs on goods that India exports face abroad can boost India’s exports in textiles and engineering goods”.
Towards fine tuning a sector specific strategy to boost exports Globally,
The government of india can just revisit the advice rendered by its Chief Economic Adviser (CEA) Krishnamurthy V. Subramanian in the latest Economic Survey released in 2020.
India must not dock “misplaced insecurity on the trade front”
India has gained from trade agreements: a 0.7% increase per year in trade surplus with partner countries for manufactured products and 2.3% per year for total merchandise.
The current environment for international trade presents India an unprecedented opportunity to chart a Mainland China like, cheap labour-intensive, export trajectory.
There by create unparalleled employment opportunity for our proliferate youth.
According to the Survey by government of india, by integrating “Assemble in India for the world” into Make in India,
“India can create 4 crore skilfully paid jobs by 2025 and 8 crore by 2030”. The Survey singled out Mainland China as a model for India to emulate.
“Mainland China’s remarkable export performance vis-à-vis India is driven primarily by deliberate specialization at large scale in cheap labour-intensive activities,
Especially ‘network products’, where production occurs across Global Value Chains (GVCs) operated by multi-national firms”.
How India can become Global Manufacturing Hub How India can become Global Manufacturing Hub