South Asian country lags in manufacturing due to weak infrastructure
India will need to forge a complete industrial chain and improve its infrastructure if the country aims to catch up with China in the manufacturing sector, experts noted on Tuesday, after media reports said the South Asian country is looking to gain opportunities from China-US trade disputes with a long-term plan to advance its industrial base.
“Ongoing trade tensions between the US and China may have a positive impact,” India’s ndtv.com reported on Monday, citing Indian Trade Minister Suresh Prabhu.
India will focus on boosting exports to the US and other world markets as China-made products become unattractive due to the trade row, noted Prabhu.
New Delhi is focusing on a handful of items including automotive parts, chemicals and electrical equipment, the report said.
“Chinese companies’ strong competitive competence in low value-added products has been bringing challenges to their Indian counterparts. If the prices of these Chinese products rise because of US tariffs, it is likely that India will take the chance to boost its exports to the US,” said Zhao Gancheng, director of the South Asia Studies Department at the Shanghai Institute for International Studies.
“But it is overly optimistic for India to expect there will be opportunities it can gain from China-US trade disputes because the trade row will hurt global production and economic development, and it will also put some pressure on India,” Zhao told the Global Times on Tuesday.
Given the situation, India is also likely to boost its agricultural exports to the Chinese market in a bid to fill the gap left by US products that have been affected by the trade row, according to Zhao.
China’s sugar refiners may buy unprecedented amounts of Indian raw sugar, with a delegation visiting the country next month to meet mill officials and inspect logistics infrastructure, another ndtv.com report said on Tuesday, citing an Indian official.
Prabhu said that India’s long-term strategy is to enhance its manufacturing capability, with a focus on the US and also other markets, according to the report.
There is a large gap between China’s and India’s manufacturing sectors as the latter still lacks the hardware and software to support its growth. For instance, India lacks core technologies, advanced equipment, electric power and technicians, Zhao said.
The World Economic Forum has ranked India in 30th position on a global manufacturing index, according to indiatimes.com in January. China was ranked No.5 on the index.
Qian Feng, a research fellow with National Strategy Institute of Tsinghua University, said that India still has a long way to go if it wants to catch up with China to become a manufacturing power.
But development efforts will help India to narrow its gap with China, Qian noted.
“There are no political obstacles when India cooperates with developed countries, which will give it the strength to carry out its long-term plan to develop the domestic manufacturing industry,” Zhao said.
India has advantages in developing its manufacturing sector thanks to its rising demand and young labor force, and its levels of education and skill development, said Atul Dalakoti, executive director for China of the Federation of Indian Chambers of Commerce and Industry.
“India aims to expand into markets across the globe – not only the US, but also big markets like China.”
Dalakoti said that India’s manufacturing capacity has started to advance and has great growth potential. “India can learn from China’s experience in developing its manufacturing industry, which has expanded phenomenally in the past 30 years and exported products made in China all over the world.”
China’s investment in the manufacturing sector in India is welcome and the two countries are expected to work as partners in the future, according to Dalakoti.