India must find unique development path to achieve its manufacturing ambitions

By Hu Weijia Source:Global Times Published: 2018/8/15 22:33:42

Wednesday was a memorable day for India, as it marked the anniversary of the country's independence from the British Empire in 1947. During the subsequent decades, India created an impressive economic miracle, lifting hundreds of millions of people out of poverty, but it has long been beset by a failure to achieve its manufacturing ambitions.

India's efforts to lure global manufacturers are working. However, after many decades of practice and development, the country has yet to find the style that works best for its manufacturing sector. Simply following other countries' experience in development would only make India a labor-intensive processing base, instead of a manufacturing superpower. India's economic rise remains fragile due to uncertainty in its manufacturing sector.

As part of India's independence day celebrations, Prime Minister Narendra Modi said Wednesday that the country will launch its first manned space mission by 2022, making India the fourth country to achieve the feat after Russia, the US and China. Breakthroughs in space technology can be the apex of a country's industrial development, and they are a window on a nation's manufacturing potential. Modi's Independence Day speech is the latest display of India's ambitions for manufacturing development.

Several years after the Modi administration launched its "Make in India" campaign, the government has taken successful action in areas such as tax and finance to encourage investment in manufacturing.

However, according to CNBC, "the percentage of the manufacturing industry in India's GDP fell to 15 percent in 2017 from 17.4 percent in 2006." Figures like that indicate India is in the process of de-industrialization, in contrast to its manufacturing goals.

India has some key advantages for manufacturing, such as a demographic dividend, expanding consumption and the accelerating development of the information technology sector.

At the same time, the country faces challenges such as a high illiteracy rate and weak industrial infrastructure. The Indian economy is unique and has little in common with Russia, the US or China, but India's manufacturing sector has failed to find a unique development model that suits its own national conditions.

India is yet to fully tap its manufacturing development potential. After more than 70 years of post-independence development, the nation's manufacturing sector is still at a nascent stage with tremendous opportunities. The country should avoid competing on the same basis as other emerging economies and develop based on its own characteristics.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn



Posted in: CENTRAL & SOUTH ASIA,EYE ON ECONOMY,CHINA-INDIA

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