Indian diplomats and ministries have been engaged in a behind-the-scene power struggle with China ever since the LAC standoff. What started out as a classic case of ‘backstabbing’ on the borders has transformed into a war on political and economic fronts. Although India’s strong move of banning 59 Chinese apps including TikTok and timely intervention of National Security Advisor Ajit Doval with Chinese delegates has managed to de-escalate the tension, it is time that India focuses towards decreasing dependency and catalyze indigenous efforts.
Corporate Lobbyist Deepak Talwar said, “India needs to work like a manufacturing powerhouse like China and become an integral part of the Asian supply chain. Indian companies must showcase their competence, their transparency to the world.” According to Money Control, China constitutes of 9 percent Indian export and 18 percent import, which constitutes of 70 percent electronic components, 20 percent automobile components, and chemical raw materials. This created a favorable ecosystem for India to manage the functioning of various industries, but simultaneously established a dependency which laid foundations of the Chinese dream of Asia domination. However, with Prime Minister Narendra Modi at the helm, India has set the wheel in motion for a new ecosystem.
In July, Prime Minister Narendra Modi announced the new Digital Indian AtmaNirbhar Bharat App Innovation Challenge, which is a collaborative effort from Ministry of Electronics and Information Technology, Niti Aayog, and Atal Innovation Mission. This challenge has two tracks. Track 1 focuses on identifying apps which are already in the market, but have immense potential to go commercial. On the other hand, Track 2 is dedicated to hand-pick entrepreneurs or startup ventures that can build new apps. In each category, government is offering up to Rs 20 lakh to the prospect apps and startups as an aid for research, development, and marketing.
While this latest move is expected to fill the void created by the Chinese app ban, India also announced two major decisions in early March with reference to Pharma and Electronic industries. Union Cabinet approved production associated incentives worth Rs 40,995 crore for electronic manufacturing companies. “The scheme shall extend an incentive of 4% to 6% on incremental sales (over base year) of goods manufactured in India,” expressed Union Communications Minister Ravi Shankar Prasad. These schemes will target the 70 percent electronic component dependency on China as it focuses on promoting local manufacturers in assembly, testing, manufacturing, and other branches.
These developments echo the stance of India towards its economy and market in the Asia and global scenario. However, it is important to understand that developing a ‘China-independent’ market will take at least a decade and the same requires a balance of indigenous manufacturers and other international players. India can look towards USA, Australia, and New Zealand as potential partners to amp up trade.
India is on the right path to become a manufacturing process with a continued government support and national players meeting the standards of quality and quantity across industries. It is imperative the country realizes the gravity of the situation and joins hands so as to tip the power scales in favor of India despite the disruption caused by COVID-19 situation.