Covid-19 pandemic and the measures taken to contain it have unleashed unprecedented challenges for the business world and brought economic powerhouses to a standstill. Even at the onset, when it was being myopically considered as a China-centred epidemic, the global economy was deeply affected. This exposed the over reliance of companies on China for the production of just about everything – from cars to electronics to medicines and more. China was considered the factory of the world, and when supply chains in China got disrupted, the entire world faced the repercussions.
In the midst of this pandemic, the global supply chains are inevitably getting reorganized. Global firms have realized the flaw in their plans and are strategically planning to diversify manufacturing bases away from China to insure against future supply chain disruptions.
The twin impact of US-China trade dispute and the Coronavirus scare has introduced a consensus across the world against concentration of value chain in China. Subsequently, it has placed India in a great position to take over the mantle and reinvent itself as a global manufacturing powerhouse.
In this world scenario, Indian Prime Minister in his address to the nation on May 12 introduced the ‘Vocal for Local’ Plan. He assured that his government was committed to remove all domestic hurdles that are currently crippling the manufacturing setup in India so as to attract a considerable share of the global value chain.
A number of factors are to India’s advantage – an expanding economy, an abundance of skilled and semi-skilled labour, a favourable geographic location that allows optimization of supply chain and minimization of transportation cost, as well as government support. India is well equipped to support bulk manufacturing, assembly, and processing. The introduction of the GST, liberalization of FDI rules, and increased budget for the manufacturing industries have propelled the growth of this sector.
All over the world, Indians have earned a reputation for being hard working, transparent, and willing to meet supplier obligations. We need to continue to instil confidence amongst firms across the world. Further improving the current infrastructure in order to support manufacturers and potential firms aiming to set up their plants in the country is the need of the hour. This includes improving channels of transportation, ensuring stable power supply, and providing avenues for upskilling the workforce.
A lot of investments to uplift the manufacturing sector have been promised. If used judiciously, they could reap huge benefits for India in the coming years. It is usually said that India reforms with a crisis. With the current world situation, we have a chance to leverage the changing geopolitical tide to catapult India’s manufacturing potential.The ultimate aim is to secure a sound place for India in the global power order.
