The manufacturing and geopolitical assumptions in your informative article, “The great uncoupling: one supply chain for China, one for everywhere else” (the Big Read, October 7), are unarguable.
What struck me as odd for its omission, though, was the role of India in a redesigned, post-pandemic global supply chain. If anything, India’s case has strengthened in the past several months of geopolitical and public health upheaval. India surely rivals Mexico’s maquiladoras, which the article cites as a location that understands low cost manufacturing. I would hasten to add that low-cost is a regrettably misleading synonym for India even if managing costs have brought huge benefits in jobs and exports. Frankly, India’s contemporary strengths are competitive and comparative advantages in power, technology, skilled labour, and its deepening ecosystem of industrial clusters.
That is why global manufacturers such as Apple and Foxconn have shown interest in “production-linked incentives” to manufacture in India. And that is even before you factor in geopolitics, which, in the long term, will certainly see India deepen its ties with the US on issues such as technology and data protection.
But there is an even stronger argument for global manufacturers in China to look at India. Our research reveals that sectors such as pharma, mechanical equipment, textiles, and auto parts, with exports aggregating to $1tn, represent activities where China is not dominant (less than 30 per cent of China exports), are sizeable (more than $5bn), and where India is eager to play (because India already accounts for 1.7 per cent of global exports of merchandise).
India’s “pull” is its engineering, computing workplace talent — a real competitive advantage.
In fact, during the pandemic, India’s economic planners have unveiled policies that are squarely aimed at participating in alternative global supply chains. Either way, India’s huge home market and genuine progress in ease of doing business make it a significant — and necessary — addition to any reshuffling of the global supply chain.
Chief Executive, Deloitte India,