How India Can Become A Global Hub For Manufacturing & Resilient Supply Chains
India has a golden shot to embark on global supply chains. Covid-19 has caused huge disruption across demand and supply. Corporations are relocating their geographic base from susceptible market origins to more credible and economical kernels. Precisely, companies are trying to diversify their production base from China to other stable countries. With strong macroeconomic fundamentals, demographic dividend, highly-skilled English-speaking workforce, ease of doing business, cheap labor costs, enormous resource accesses, and an expanding market of 1.3 billion people, India has an exclusive chance to be the favorable investment destination across the globe.
Southeast Asian countries including Vietnam, Indonesia are attracting many American and Japanese countries for diversification. Supply Chain Resilience Initiative (SCRI) as a trilateral approach by Japan to trade with India and Australia (with ASEAN probable to join) is an initiative to diversify the supply chains. With South Asia steadied for a growth liftoff, economic integration of South Asian countries becomes crucial. Substantially India is being seen as the hub for emerging supply chains.
To ameliorate US-China trade war fallouts, Apple Inc with a budgetary outlay of Rs 200 billion is set to shift its iPad manufacturing assembly to India. Elon Musk-led Tesla registered its subsidiary Tesla India Motors and Energy Private Ltd. Tesla also plans to set up an electric vehicle manufacturing division in Karnataka. On the heels of this statement, Starlink under SpaceX—the super-fast Internet venture—opened its pre-booking in India for $99. Amazon declared its Fire TV stick device manufacturing – its first production line in India via a subsidiary of its manufacturing partner Foxconn Technology Group. Swedish retailer IKEA having bought a 48,000-square-metre plot in Noida also proposed to launch its first shopping centre in India—being among the world’s largest sites.
Aatmanirbhar Bharat outlining economy, infrastructure, system, demography, and demand is an endeavor to become self-sufficient. Production-Linked Incentive (PLI) scheme attempts to accelerate domestic production and invite foreign direct investments. India’s Look East policy encourages economic and strategic relations with Southeast Asian countries to strengthen its importance as a regional power. The Indo-Pacific region is home to the fastest and growing economies and military powers in the world.
While India rises to be a desirable preference for investors, the questions that need to be addressed are: “How competitive are India’s policies to attain a resilient supply chain?” “Are they enough to obtain a prime stance in the global economy?” It appears that Indian value chains are bedeviled with inefficiencies sinking it below international standards.
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