Global supply chain concerns spurred on by medical emergencies, natural disasters, and geopolitical occurrences are being addressed. Recent occurrences like the coronavirus epidemic and the conflict in Ukraine are only two examples of how they hampered the world’s supply network and caused substantial increases in prices.
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Can India Overtake China As the Third Biggest Economy?
In order to compete with China and overtake it as the world’s third-biggest economy by the end of this decade, India is currently laying out its strategy for becoming increasingly integrated into global supply chains.
Each action taken while supplying an end product or service to consumers is referred to as a supply chain. Any level of interruption causes complications, shortages, or even a surge in prices, which has an impact on the markets as a whole.
India may gain from a strengthened legislative framework for SEZs (Special Economic Zones) with duty-free imports by developing an alternative setting that encourages industrial development and joining global supply chains. SEZs have improved IT-related operations, but they haven’t had much of an influence on manufacturing. The fact that the private sector was responsible for creating SEZs appears to be just one of the main causes. For the vast majority of it, they were insufficiently small to be successful in the international markets.
Where Does India Stand In The Global Supply Chain?
Prime Minister Narendra Modi emphasised on Sunday that India had proven to be a reliable country during the Covid epidemic and questioned the effectiveness of the global supply chain, which broke down just as the world needed it most.
India, which has historically been a great market for international retailers, is now establishing itself as a major centre for manufacturing. A number of major corporations, including Apple, have already begun manufacturing in India, and the nation plans to commence indigenous chip manufacturing by the end of 2024.
The Prime Minister claimed that “the demand for Indian goods has grown on the international stage,” noting his “Vocal for Local” campaign, which aims to stimulate domestic production in an increasingly globalised society. He claimed that in order for enterprises to transcend the bottom line, supply chain resilience and long-term viability need to be prioritised.
In light of the current geopolitical circumstances, the Western world is relocating its supply chains away from China, and India is looking to take advantage of this chance to expand. The government recently established a significant objective to export $2 trillion worth of goods annually by 2030.
The Finance Minister’s Views
Nirmala Sitharaman, the Finance Minister, likewise stated that India aims to play a significant role in the supply chain via its strategies for output incentives and the expansion of its home consumer market. India is ready to play a more significant part in global value chains because it has stable policies, skilled labour, and a widespread willingness to embrace digital technologies. She also extended an invitation to American companies to make investments in India.
According to Sitharaman, the entire country complies with the criteria for an equal and transparent economy and is well-positioned to play a larger role in the global supply chain as larger global companies expand their procurement origins.
In Sitharaman’s words, she stated that production-linked incentive programmes are attracting global value chains to India, assisting it in becoming a major producer of manufactured products. With ‘Made in India’ desktops and laptops, India is also vying for a significant market share in the electronics industry. It is currently the second-largest manufacturer of mobile phones.
Conclusion
Due to its sound macroeconomic principles, favourable demographic dividend, improved convenience of carrying out business, and accessibility to capital to support growing manufacturing operations, India may appeal to investors from around the world as an attractive investment option. To realise this opportunity, the government, local governments, and enterprises would have to collaborate. The administration claims that India is progressing towards joining the global supply chain. It will be swiftly launched and additional growth is expected if the prospective prospects are welcomed and an effectively planned course to move forward is developed and effectively carried out.
