India needs Chinese support to seize manufacturing relocation opportunities

By Xiao Xin Source:Global Times Published: 2019/10/10 21:48:40

Illustration: Luo Xuan/GT

Why are manufacturers still showing little enthusiasm for India, five years after the Make in India initiative was launched? 

The seed of a viable solution to this situation may lie in the upcoming meeting between Chinese and Indian leaders in the coastal city of Chennai. 

At the invitation of the Indian Prime Minister Narendra Modi and the President Bidya Devi Bhandari of Nepal, Chinese President Xi Jinping will attend the second informal meeting with Modi and pay a state visit to Nepal from Friday to Sunday, Foreign Ministry Spokesperson Hua Chunying announced on Wednesday, as reported by the Xinhua News Agency.

So long as New Delhi begins to tune its mind-set for Beijing-enabled success, India could surely achieve its goal of becoming a global manufacturing hub. 

Findings from a recent study by Japanese brokerage Nomura revealed that out of 56 firms that moved their production out of China between April 2018 and August 2019, only three went to India. Vietnam sat at the top of the relocation destination rankings with 26.

The results are a disappointment for India, which has over the past few years made a resounding push to rev up its manufacturing sector.

However painful it might be, India has to wake up to the reality that the nation's manufacturing capabilities, as measured by its logistics facilities, manpower and other complementary infrastructure, barely live up to its ambition.

Another hindering factor is India's insistence on not joining the China-proposed Belt and Road Initiative (BRI), which exemplifies how misleading mind-sets have cost India opportunities to become a manufacturing star over the years. 

But the meeting between the leaders of the two nations could provide New Delhi with a chance to change this situation. If New Delhi can take a genuinely pragmatic approach to the meeting, following the first such relation-deepening exercise in Wuhan, Central China's Hubei Province in April 2018, the hopes for Make in India might come true. 

Addressing a media briefing on Wednesday, Chinese Vice Foreign Minister Luo Zhaohui said that the meeting in Chennai will set the tone for the next stage of development for China-India relations. It is hoped that India, for its part, would do its best to steer bilateral ties toward enabling, inclusive growth.

Also worth noting is that the visit to Nepal, the first by a Chinese president in 23 years, offers India a precious chance to render Kathmandu a contributor to China-India relations. 

The visit to Nepal, an important BRI partner in South Asia, will surely result in historic implications, Luo told the media briefing. Speculation is mounting that cross-border rail connectivity between China and Nepal may become a priority. In the case of New Delhi, it's time to abstain from vying for domination in rail standards used in its landlocked neighbor.  

But it depends on a shift toward a modest mentality that would prepare India for China-enabled success. 

China's rise as a global manufacturing hub since its reform and opening-up began in 1978 has vindicated the road to success that is underpinned by the nation's efforts to attract foreign investment, in terms of both funding and R&D.

It is opening the door to foreign investment and sparing no effort in capitalizing on varied benefits enabled by globalization that have laid the foundation for China's economic capacity, based on which the nation is now transitioning toward higher quality growth. 

It needs to be admitted that since coming to power in 2014, Modi has pushed forward with a raft of reform measures. His meeting with the Chinese president in Wuhan was also a compelling example of how the two Asian giants could join hands to power the global economy.

Still, it seems that India is excessively obsessed with its ties with the US. In a rare public showing for a foreign leader on US soil, President Donald Trump along with roughly 50,000 Indian-Americans attended the "Howdy, Modi!" rally in Houston, Texas in September to welcome Modi, where he told the US in nine languages that all was well in India.

With the Nomura findings indicative of no tangible support from its allies in the arena of manufacturing, it is high time that India reflects upon its past practice and embraces a multitude of opportunities provided by the BRI, for example, to remake its manufacturing.

If New Delhi takes the opportunity this time around, the nation, the world's second-largest by population, will benefit hugely from the relocation of manufacturing from China.

The author is a reporter with the Global Times.


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