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Assemble in India: Why it may not be prudent to follow China’s strategy

The Economic Survey 2020 was tabled on Friday, January 31st, amidst an economic slowdown, coupled with rising food inflation. While the Survey emphasized on the importance of an expansionary fiscal policy and an investment-led growth, it also advocated 10 key ideas that could help address some of the structural issues that have caused the slowdown. Among the idea of creating wealth, enabling entrepreneurs, examining government’s intervention, and reducing financial stress, one of the focus was on creating jobs and growth by emphasizing on “Assemble in India for the world” and integrating it into our “Make in India” programme.

The desire to continue to build on initial reforms and programmes undertaken during Modi 1.0 comes across loud and clear in this idea. But what it also stressed was to chart a China-like, labour-intensive, export trajectory. It was argued that by adopting a strategy like that of China, India can not only improve its share in global exports, but also create well-paid jobs. The emphasis was on specialising at large scale in labour-intensive sectors and enabling assembling operations at mammoth scale, specifically in network products. The survey proposed to combined this with targeting to export to larger economies through prudent trade policies.

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