The outbreak of the Covid-19 pandemic has disrupted almost every nation across the world. From Japan to Australia, a number of countries have targeted China over failing to alarm the international community on the issue of deadly virus. There are high possibilities that China might face worldwide backlash alongside struggling with the steep economic slowdown.
On the other hand, many experts believe that India is the best alternative for the Chinese market. Along with the economic slowdown, China is facing many structural problems. The spread of the coronavirus from the country has proved to be a blow for China not only internally as well on the international platform. Amidst such a situation, India can exploit the best out of China’s discomfort to become the global manufacturing hub.
Along with several economic and structural problems such as supply chain disruption in China, it is the best opportunity for India to correct nation’s vulnerabilities. At present, India heavily depends upon China for bulk of its import requirements across the sectors. Lack of availability of raw materials, like special alloys and steel are one of the main reasons why Indian manufacturing units are not able to compete with the Chinese ones. Along with it, India must do away with the duty-free imports of manufacturing equipment to encourage indigenous production. Incentivising the Indian manufacturing startups such as lower cost finance would also be required.
However, assuming India to be the natural beneficiary of the companies moving out of China under their de-risk plan could be a mistake. Although, India is the leading destination for the companies planning to relocate their manufacturing bases, there is a need for right policies by the government for improving the infrastructure and providing skilled labour to the companies moving in the nation with high hopes and expectations.