Can India replace China as global manufacturing leader?

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India may be able to catch up with Chinese manufacturing, a recent report by Chinese media said.

A Global Times article has recently revealed that India, “a rising star in the world’s manufacturing arena,” may be able to get closer to global manufacturing leadership in the next decade.” There are, however, a number of factors to be considered.

Military standoff in Doklam’s effect on businesses

There is an ongoing call by right-wing organizations to boycott of Chinese goods in India’s Doklam region amid a tense ongoing military standoff.

Just yesterday, a Rashtriya Swayamsevak Sangh (RSS) general secretary Suresh Bhaiyyaji has called for promotion of swadeshi goods and boycotting of Chinese products: “China is constantly making efforts to grab the Indian market. So, Chinese goods should be boycotted.”

“Our alert armed forces are capable of checking intrusion at the borders, but to prevent the country from economic slavery, people have to check the entry of Chinese goods into Indian markets,” he added.

An article by the Hindustan Times, shows a survey revealing that 83% of 8,973 people still prefer a Chinese product over its Indian counterpart because they think it’s less expensive.

Another survey shows that 52% of 8,213 respondents, however, believe that Indian products have better quality than their Chinese versions. Only 21% said that goods made in China have better quality, and 17% voted that the qualities of both products are more or less similar.

Economic growth in India

The Global Times article suggests that “absorbing foreign investment could be a shortcut for India to realize its dream.” Right now, however, it’s still significantly behind Chinese products.

While manufacturing in India is showing promise in aspects like economic growth and a young labor force, the article states that it can take the manufacturing sector years to build: “it can take two or three years to investigate, negotiate and build a factory, and then another year or two to establish sales channels in the country so that local residents can access these made-in-India products.”

The Global Times says that the South Asian country can, indeed, catch up with China, “but the horizon will recede indefinitely into the future if India metes out unfair treatment to foreign-based investors and relies simply on domestic enterprises to turn itself into a global manufacturing hub.”

The article said that products that are made in India don’t necessarily need to be produced by domestic companies, citing that Huawei smartphones that are made in India “should enjoy the same treatment as local products because the Chinese company can create jobs and generate tax revenue for the local economy.”

In September last year, Huawei announced their collaboration with Flex India to manufacture smartphones in Chennai. Minister for IT and Law and Justice Ravi Shankar Prasad said last year that they are working towards making India an electronic manufacturing hub.

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