India China Trade: Nearly a decade after the economic liberalization phase started in 1991, some meaningful results started showing some happiness and people were fascinated towards it, but in the same period China imagined a big picture, which is innovation. , Productivity was based on research and development. That is why he established himself as the workshop of the world and there came a lot of prosperity. On the other hand, we have created a big market in the country, but it is dependent on imported material, so it is our compulsion to continue trade with China to some extent at the moment.
Manufacturing sector in the world changed the fastest: the trade of countries from India to the world has been going on since time immemorial. We have been a pioneer in the field of industry and trade. But during the last few decades, the rules of industry and trade in the world changed which changed a lot in most of the countries including India. The manufacturing sector in the world changed the fastest. Its role has also changed. In fact, the manufacturing sector multiplies progress, generates employment and drives growth. It has many other contributions. It promotes productivity, innovation and business. Service nurtures the sector and generates wealth. If manufacturers have enough new opportunities, they will certainly be energized by innovation and a new global consumer class will arise.
India and China are both engines and drivers of growth: in the meantime a lot has changed in the era of global business. Today people in most countries of the world are adamant on boycotting Chinese goods. Many people have also taken steps in this direction. The whole world is worried about this. Today, one-fifth of the world economy, which supplies 40 percent of the material worldwide, is in doubt. But we also have to understand that big economies are interlinked. India and China are both engines and drivers of growth and both countries have the potential to grow for the next 50 years.
What we should do: Inspired by the charge of boycott, our policy-makers can choose easy and popular measures i.e. ban Chinese products and insist on adopting Indian products. An exuberance has arisen from the “innovation” of products made in China. But most people are unable to understand that these cheap imports make our exports competitive. We must face the bitter facts. Why is it that our share in global trade is just two percent?
China has transformed around 500 categories of our domestic production and 3,000 products, including mobile phones, toys and many household items. We will not suffer any harm by banning these items. If we prohibit items related to pharma, automobile, electronics, telecommunications, then the result will not be in our favor and these industries will be badly affected. Not only this, about 15 percent of the profit making MSMEs will end, due to which lakhs of people are expected to be unemployed. This will also harm consumers. Banning cheap imports can increase inflation, causing damage to the middle class and the poor being deprived of cheap goods.
Our economy stands at the turning point of policy change: it takes time to build a strong economy and competent leadership. China planned it decades ago and then implemented it better. It is fortunate that China has planned global supremacy at a time when India is in a better position. Our economy stands at the turning point of policy change. We are consumer based and domestically dependent. Demography is favorable to us and democracy is strong. However – the situation of Make in India should be a big lesson for us. Modern manufacturing requires specialized and state-of-the-art technology. Our labor laws are outdated and impractical. The tax structure is quite complex. Land acquisition is beset by political influences and complexities. The government’s attitude towards business negotiations is full of apathy and hesitation and at times it looks aggressive, but it does not yield any positive results.
Our industries benefit in a risky way. The skills ecosystem with the best service options is two decades behind schedule and the rest are operating in line with the US market. There is also a lack of training-and-technology-able to establish global synergy with the most preferred – white collar – and – call centers. We have a competitive edge in about 10 sectors and these should be the focus. A recent study shows that if we work optimally in only six areas, adequate government support will provide employment to at least four million people and reduce dependence on sugar imports by 70 percent. We need to know that the lack of effective partners and suppliers in the industry sector reduces competition, reduces value and weakens the growth potential. In the same way, they face regulatory hurdles and become the drivers of change in policy along with changes in the system.
Today, the rupee is more valuable and we need to take appropriate steps. The exchange rate is a double-edged sword, the cheaper rupee will make our exports competitive, while the stronger rupee will make intermediate imports cheaper. It is a delicate balance. Our aim should be to establish India as a global hub in the fields of manufacturing, design and innovation. For this we have also tried and many times we have been successful in getting things back on track. Our leadership needs to prepare a new path to make it more practical. In such a situation, when the Prime Minister talks about starting construction from the beginning, he should also pay full attention to how it can be resolved in a basic way. If this happens, India can definitely fall into the category of developed countries. But it is not so easy. The leadership of the country cannot do this alone. It will require courage, skill and knowledge and enormous support from every corner. Nothing is impossible in the world and if leadership wants it is not too difficult to achieve.
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