India Should Ask The Right Questions About Manufacturing

Atma Nirbhar is unlikely to become a reality unless the government puts the right policies in place. For this, we need conceptual clarity on what our goals are

- Prosenjit Datta

Practically every Indian manufacturer who depended on China for inputs has started looking for alternatives. The lockdown of Hubei province in China because of the coronavirus followed by the national lockdown in India had already disrupted their supply chains. Even as the lockdown conditions were being eased in several states, China’s unprovoked aggression at the Line of Actual Control (LAC) has again thrown things out of gear.

Goods coming from China are being subjected to extra scrutiny at entry points, adding to delays, while the government is mulling punitive duties on some Chinese imports. Consumer sentiment about China-made goods is also running high with boycott calls becoming more frequent.

Every manufacturer is now aware that while all imports from China cannot be stopped overnight, they will need to find alternative sources to de-risk their businesses. The question is: Should they look to nations such as Vietnam, Korea, Taiwan or Indonesia who also have formidable manufacturing prowess even if they cannot always match China’s prices? Or should they try and develop an ecosystem of vendors within India given PM Narendra Modi's Atma Nirbhar call?

While the latter option fits with the rising nationalist sentiment in the country currently, it is unlikely to become a reality unless the government puts the right policies in place. That, in turn, means posing the right questions.