The coronavirus pandemic has shaken global economies in such a way that the old world order - economic as well as political - has been shattered. China unwittingly had destroyed its own position as a manufacturing hub. Additionally, its recent aggression in Ladakh has galvanised support towards India. A planned and tactical strategy can tip the scale towards the country, pave the way for economic growth, and transmute India as the manufacturing hub, with an added advantage of availing ready consumer market to the multinational companies.
How big is the Indian market?
Well! To begin with, India is the world's fifth-largest economy. It is the world's second-largest consumer of mobile phones and also the second-largest importer of arms. It has the biggest consumer base of internet-based Apps. The country is the world's third-largest consumer of oil and also for solar power equipment. It has the world's second-largest population with a massive increase in the number of consumers pushing the middle-class.
A report by the World Economic Forum estimates that in the next 10 years, India is poised to become the third-largest consumer market after the US and China. It reports that by 2030, consumption spending would grow from the present $1.5 trillion to a whopping $6 trillion.
Make In India v/s Made In India
For India to fulfil its dream of being a self-reliant nation and also present itself as a manufacturing and consumption haven, it would need complex manoeuvring on the part of the government, supported by the efforts of the industry.
The Indian government, through its policy and tax reforms, is steadfast in promoting Indian entrepreneurs, MSMEs to turn 'Make in India' into a success. At the same time, it is positioning itself as a global hub of manufacturing by inviting multinational companies to set shop by providing incentives and offering them ready-to-use land and developed infrastructure and also working on enhancing the ease of doing business by removing bottlenecks wherever possible.
This inter-play focussing on local manufacturers alongside global players would need a well-developed ecosystem of the industries and related infrastructure. A competitive ecosystem, encompassing low-cost, skilled labour and faster access to a large market can be a very conducive preposition for global players wanting to shift to India.
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Who can be partnered with?
In this churning of the disrupted world order where old friendships give way to new partnerships, it will be essential to choose your trade partners cautiously. The US, UK, Japan and Russia are some of the biggest markets that India should strengthen its ties with. Saudi Arabia and the UAE would also be strategic partners for increased trade, given the recent power shifts in the areas of energy, refining and petrochemicals.
India should focus on a few champion sectors such as digital services, medical devices, consumer goods and food processing, lifestyle products like furniture, leather goods and handicrafts. At the same time, we should consolidate our base in the well-established sectors such as automobiles and related components, electronics and IT and ITES.
The country could turn this unprecedented turn of events and the plausible outcome in its favour. Employment generation and economic growth with increased per capita income and gross domestic product growth will undoubtedly result in a social dividend with better facilities, education, and healthcare for the 1.3 billion citizens of this nation. This may be a path less travelled by us Indians, but we must strive for a better future. The author is the secretary-general of national industry body ASSOCHAM.