Advertisement
If India wants to challenge China as a global manufacturing hub, it will have to move quickly
- India has many hurdles to overcome, from reskilling workers and ensuring power supply stability, to adding deep seaports and tax breaks. Critically, given stiff competition, speed is key if India is to capitalise on the supply chains moving out of China
Reading Time:3 minutes
Why you can trust SCMP
As China reels from the impact of Covid-19, many are asking: does India have an opportunity to emerge as an alternative global manufacturing hub? That is easier said than done, for a host of reasons.
Advertisement
First, Indian manufacturing is tailored to the domestic market and it takes time to make the changes that will allow manufacturers to ramp up production for an international audience.
Second, only some locations in India are suitable for large-scale production, and there are logistical challenges in getting raw materials to these production hubs and in getting the finished products out.
Third, the large-scale reskilling of workers required, to take on the jobs which might move from China, will not happen overnight. It will need significant investment from both the government and the private sector.
Fourth, there is already a lot of competition from countries such as Vietnam and neighbouring Bangladesh. India is a democracy and a federal one at that, which means that laws differ from province to province, making things difficult for potential investors.
Fifth, there is shifting local-level politics. For example, some foreign entities had indicated an interest in a new smart city, Amaravati, to be set up as the capital of the southern Indian state of Andhra Pradesh, but with the change of government in that province, things seem to have moved in a completely different direction.
Advertisement
Advertisement