An economy-crippling lockdown doesn’t seem to have deterred India from daring to dream big as its ambition to replace China’s role in the global industrial chain expands.
India’s northern state of Uttar Pradesh is forming an economic task force to attract companies eyeing a manufacturing shift from China, according to media reports. However, despite such efforts, it is still delusional to expect economic pressure facing China amid the COVID-19 pandemic will allow India to become the world’s next factory. Radical voices saying that India is on track to replace China reflect nothing but nationalistic hubris.
And such conceit has gone beyond economic issues to reach the military level, which has led some to mistakenly believe they can now confront China with border issues. Such thinking is undoubtedly dangerous and misguided. Thus far, Chinese border defense troops have bolstered border control measures and made necessary moves in response to New Delhi’s recent attempt to unilaterally change the border control situation in the Galwan Valley region.
Western media outlets have been enthusiastic in touting India’s competitiveness by comparing its market potential to China’s, which has given some Indians a false impression of the actual situation. It would be unrealistic to think that there is any chance India could take China’s place at the current time. Tensions between China and the US are not an opportunity for India to attract relocating industrial chains, because the South Asian country is not prepared to receive such a manufacturing shift given its poor infrastructure, lack of skilled labor and stringent foreign investment restrictions.
India has been dreaming of becoming the next world factory, and the Modi government has launched various initiatives to forward that goal, such as the “Make in India” campaign, which has done little to impress the world. Observers have generally attributed India’s manufacturing woes to its failure to conduct pragmatic reforms, which, if executed, would be more efficient than an empty slogan.
Fundamentally speaking, India’s indulgence in its manufacturing prosperity illusion is partly derived from a rise in nationalism at home. A trend of US adoration has brought some to believe they could be better off by following the path set out by the US. Such thinking has often led India to make decisions unintentionally in line with the American interests at the expense of its own. Ironically, the US’ punitive trade policy against India may also help break its illusion.
At present, the Asia-Pacific economies are undergoing tremendous changes, with industrial chains adjusting to coronavirus shocks. The battle between the dragon and the elephant of Asia is also evolving rapidly amid the changing geopolitical pattern, but the two major emerging markets will find a way of getting along. And during that process, pragmatism is what the Indian economy really needs, rather than wishful thinking fueled by hubris and derailment.