How India is looking to ramp up manufacturing to counter China
India is set to go all out to try and become a more attractive manufacturing destination, in a bid to counter China.
According to a report in The Economic Times, India is looking to fire up its manufacturing and export-intensive sectors through more support measures in the upcoming budget, eyeing the space created by a slowing Chinese economy.
The report says that the finance ministry, which has begun its pre-budget consultations with various ministries and departments, has indicated that schemes that push local manufacturing and exports offering various support measures will get priority in fund allocation.
But why is India looking to push past China in a hurry?
China is expected to grow at a slower pace than expected, and the geopolitical developments may push multinational companies to look for alternatives, the India government believes.
Moreover, there is a growing worry among policymakers about exports losing steam with some of the key markets for Indian goods witnessing recession. The finance ministry’s Monthly Economic Review for September cautioned that the global recession could moderate export growth and affect the country's trade balance.
How have Indian exports been growing in the recent past?
India's exports grew 16.96 % in the April-September period this year over the same period last year.
What do economists have to say about this?
Leading economists have also suggested that India grab the opportunity due to China slowing down and increase its share in global trade, which is currently 1.7%, significantly lower than China’s share of 12%.
The labour-intensive products with the Chinese wages is not going to last for a long time in the marketplace and somebody big have to come into this to step into the shoes of China, Arvind Panagariya, professor of economics at Columbia University and former vice chairman of the Niti Aayog, said on the sidelines of an event Saturday. He added that countries like Vietnam were ahead of India in capturing some of the space.
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