On the 10-year anniversary of Make in India, Amitabh Kant, India's G20 Sherpa says that for India to grow at 9-10%, it will have to grow its exports and that India should never be protectionist.
As India enters its 10th year in pitching Make in India to the world, one of the champions of Make in India says that even as India builds its indigenous capacities and gets the world to Make in India, it should not veer towards protectionism. India has built a tariff wall in the last decade. A paper by former chief economic adviser Arvind Subramanyan noted that India had witnessed 3,200 tariff increases. The tariffs have risen on an average to around 18%, higher than other countries such as China, Vietnam and Bangladesh.
Amitabh Kant, India's G20 Sherpa is of the view that if India has to grow it has to export to the world.
"So my belief is that India should never be protectionist. Every time India has grown at 9 to 10%, it has grown when exports have grown. So India must penetrate global markets, India must export in a very big way. The only way for to grow on a three decade period at 9 to 10% is through exports. Japan, Korea, Taiwan, China, all have grown on the back of exports. Exports are the key to our growth strategy. And therefore, we, India cannot afford to be protectionist, it must be a very innovative nation as far as exports are concerned."
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He added that India needs to target becoming an integral part of global value chain.
"You should be able to import at low prices and import your components at low prices, import your inputs at low prices, do value addition, and then export to the global markets. That's the way global value chains happen. And that's the way it's happening in the case of smartphones. That is why you are becoming a major manufacturer. Now, don't expect value addition in India to take place overnight, it'll take three to four years. And when you spread it over three to four years, India will also become a component manufacturing nation."
He added that the journey of India becoming a component manufacturing nation may take a few years and India could have to go the route of a joint venture with some companies. But over a period of time India will build its manufacturing.
"Because that's the way China became, it was tied up with Japanese companies, it tied up with Taiwanese companies, it tied up with German companies to push manufacturing there. And over a period of five to six years, it started doing component manufacturing and became the manufacturing centre for the rest of the world.
So what you are seeing in India today is the beginning of the manufacturing process, it'll take you another four to five years to do component manufacturing. China is a creation of America, the American companies outsourced all their manufacturing to China, America lost the art of manufacturing. America is now trying to get manufacturing back in high value added sectors, through the Inflation Act, the Inflation Reduction Act, through the CHIPS Act, it is trying to get manufacturing back," he added.
You can watch the full conversation with Amitabh Kant here: Amitabh Kant on India's Mega Manufacturing Push and 10 years of Make in India
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