India Blocking Chinese Experts

Source-This post on India Blocking Chinese Experts has been created based on the article “The problem with India’s blocking of the Chinese” published in “The Hindu” on 30 July 2024.

UPSC Syllabus-GS Paper 3 – Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment

Context– The article discusses how India has significantly reduced visas for Chinese technicians due to national security concerns. In 2019, 200,000 visas were issued to Chinese nationals, but this number fell to just 2,000 in 2022 after border clashes in 2020. The reduction is mainly due to security issues and accusations of visa abuse and tax evasion.

What problems arise from India’s decision to block Chinese technicians?

1) Skill Gap in Indian Manufacturing -Indian businesses face a big skill gap in manufacturing. Companies with Chinese machines can’t use them properly without Chinese technicians, leading to idle machinery and missed export orders across various industries.

2) Lack of Integration of Foreign Knowledge– East Asian economic history shows that foreign knowledge works best with well-educated local workers. India’s weak education system makes foreign expertise even more essential.

What is the difference between India and China’s education system?

1) China-

A) China’s strong primary education from the Communist era set it up for rapid growth. Deng Xiaoping sent officials abroad for study and invited foreign investors, which helped China become a major global manufacturer.

B) Chinese universities are top in computer science and mathematics, and Chinese scientists are leading in electric vehicles, solar technology, and artificial intelligence.

C) Since 2018, Chinese students have been top performers in the PISA (Programme for International Student Assessment) tests, which assess global education standards. In contrast, India took part in the PISA test in 2009 but dropped out after a weak performance.

Read More- India’s Strategic Challenges in the Face of China’s Rise

2) India-

A) India has built more schools and enrolled more students, but education quality is still poor. Only about 15% of Indian students have the basic skills needed for a global economy, compared to 85% of Chinese students.

B) Indian universities, including top ones like Delhi University, are declining. Even graduates from the Indian Institutes of Technology are having difficulty in finding jobs.

What are the issues with Indias Employment and Labor Market?

A) Decline in IT Jobs and Slow Growth inService Exports -India’s technology service exports are growing slowly. IT jobs have fallen from over 5 million in 2023, which was already low compared to India’s working-age population of a billion.

B) Low Share of Labor-Intensive Exports -India’s labor-intensive manufactured exports, excluding petrochemicals and chemicals, constitute just 1.3% of global markets. This is even less than Vietnam’s share.

C) Atmanirbhar Bharat- India aims for self-reliance, but its economic growth is increasingly reliant on expertise from abroad, especially from China.

D) Foreign Investment– Foreign investors are becoming hesitant about investing in India. India has missed the “China-plus-one” chance that Mexico and Vietnam have taken advantage of.

E) Currency Issues– An overvalued rupee is making it harder for India’s labor-intensive manufactured exports.

Way ahead-

A) India needs to improve its workforce issues rather than just focusing on its global status. The competition is growing, and if these problems aren’t fixed, many people will keep waiting for good jobs.

B) Economists suggests that India should focus on technology-driven service exports.

Question for practice

What issues stem from India’s decision to block Chinese technicians? What are the challenges facing India’s employment and labor market?