Strategic Que Sera Que Sera

Context: In light of the global supply chain shift, India must restructure its economy to attract global investors.

Strategic Objectives for restructuring:

1. Unifying India with economic development that is plural and rural.
2. Balancing the approach to regional development.
3. Strengthening and leveraging India’s domestic market to attract FDI.
4. Modernising agriculture, to create value-addition and advance rural aspirations.

Strategy by multinational companies to de-risk their manufacturing in an evolving new world order

1. China Plus One policy: hedging against a primary location.
2. Alternative to China
3. Locations with big local markets and low costs: to scale up and produce for both, the domestic market and exports. 

Opportunities for India

• Reconfiguration of global supply:  India can become a secondary location as an alternative to China.

• Large domestic Markets: a clear differentiator for India as it did for China a decade ago. A large consumer base is viewed as an opportunity.

• India’s Pull: Sectors like engineering, computing, and science workplace talent act as a pull for global investors in India.

• Secure supply chains: in India like the case with the Information technology industry has provided advantage over risk of disruption as can be seen with China.

Way Forward:

• Focusing on sectors: like pharmaceuticals, mechanical equipment, textiles and auto parts where China has less advantage (only 30% of China exports) and India has great opportunities (only 1% of global trade.)

• Handholding: through the strategy of food diplomacy, consumer awareness and import substitution and anchor investments that generate growth, scale and value.

• Incentivising partnerships: between food companies, machinery manufacturers, research and academic institutions and startups to develop processing and packaging technology.