They’re locked down, we aren’t: Indian manufacturing has a huge China-made opportunity but it’s open for only a brief period

Context: India and China are currently facing very different scenarios wrt the COVID pandemic. Google Mobility Data, a special mobility trends dataset created for the pandemic, shows that most Indian public spaces are now just as busy as pre-Covid, if not more.

China, on the other hand, faces a very different situation. Covid cases are rising there dramatically, and severe lockdowns are back. A large city like Shanghai (population: 2. 6 crore) has been locked down with people confined to their buildings for weeks.

How is China’s situation impacting the world?

The situation in China is impacting business.

It has also led to a worsening of a problem the world was already suffering – supply chain issues.

– Chinese lockdowns have meant workers can’t reach factories, which means factory outputs drop, which means the world doesn’t get goods. People in the US currently complain about long waits for several items – beds, closets, automobiles and appliances to name a few.

Is there an opportunity for India?

Yes. The solution to global supply chain issues is India.

China, with unmatched efficiency, affordability, productivity and infrastructure became the manufacturing king of the world. However, today, that same dependence on China is causing problems. Today, companies worldwide are finally willing to listen to something we have been trying to say for years – Make in India.

Make no mistake, the current Chinese supply chain issues are a once-in-a-lifetime limited opportunity for India to shine and present itself as an alternative, diversified manufacturing hub.

What should India do presently?

India must act and announce a mega-plan to attract more companies here as soon as possible. Several schemes have been announced to attract manufacturing here. Apple now makes in India. Tesla is being courted as well.

Just as we have inspectors and bureaucrats who are ready to stop operations if something is going wrong, we can have senior government officials incentivized to do the opposite.

India can have bureaucrats who are relationship managers, whose performance is evaluated based on how many new companies they help get up and running in India.

Attracting investments isn’t always about offering monetary incentives and tax breaks (Indian corporate tax rates are already moderate). India can attract investors by offering predictability, efficiency and peace of mind.

Way forward

This opportunity is, however, for a limited time only. For Covid and its lockdowns will eventually leave China as well. Then the world will simply forget the Chinese manufacturing problems of the past.

Source: This news is based on the article “They’re locked down, we aren’t: Indian manufacturing has a huge China-made opportunity but it’s open for only a brief period” published in the Times of India on 6th May 22.