Is India’s big market size a factor in compelling China to settle border issues peacefully?
India's potential to manufacture products in the country and become a global supply chain will force China to settle border disputes with its South Asian neighbour amicably
The Galwan Valley faceoff became one of the deadliest clashes between India and China in the past few decades. After the loss of lives of 20 Indian soldiers, in the spirit of nationality, the emotion of “boycotting” Chinese products delved deep among people.
As simple the idea may sound, the implementation may take a long time but is not impossible keeping in mind India's market potential to manufacture products in the country and government's constant efforts to economically reduce reliance on China.
According to Indian Manufacturing Sector in India Industry report, released in July 2020 by Indian Brand Equity Foundation, manufacturing has emerged as one of the high growth sectors in the country.
The report further noted that with the help of Make in India drive, India is on a path of becoming the hub for hi-tech manufacturing as global giants such as GE, Siemens, HTC, Toshiba, and Boeing have either set up or are in process of setting up manufacturing plants in India. It said that the Cumulative Foreign Direct Investment (FDI) in India’s manufacturing sector reached US$ 88.45 billion during April 2000-March 2020.
The government of India is also taking steps to reduce economic reliance on China. Last month, in a breakthrough, the government announced its decision to bar companies based in countries sharing land borders with India from any government procurement and contract.
The first implementation of the step might be visible if Chinese telecom vendors will be shut out from the 5G trials, as it is in the discussion. Besides, India has already banned more than 50 Chinese applications. Further, it was made clear to the e-commerce firms to display the country of origin for the products they sell.
Self-reliance and “National will” can help India
Despite the efforts, India’s market dependence on China, from smartphones to raw materials and pharmaceuticals, is huge. On this, Former India’s ambassador to the US, Meera Shankar expressed her views in an article, “Our dependence can be reduced substantially if there is a national will and resolve to do so.”
Swearing by India’s new rulebook of ‘Aatmanirbhar Bharat’, India can give a befitting reply to China. Self-reliance can take us a long way ahead. Shankar said that India’s market has potential and most of the products that are made in China can be made in the country itself.
There are some areas where we are highly dependent on China for inputs like the Active Pharmaceutical Ingredients. India imports two-thirds of its API from China. The former Indian ambassador to the US pointed out a need for a “vigorous approach” to start early production in India or procure from other countries. She further had a view that the government could provide support for environmental compliance and hence the costs of production can be brought down.
Talking of self-reliance in critical products like solar panels and grid storage batteries, Shankar said that private investment for manufacturing of these products in India would be triggered by assured government procurement at a commercially viable price with full value-addition in India for five years from the commencement of production. Repeated bids providing provisions of land, infrastructure, and cheap electricity, could create a competitive industrial structure, she said.
“The bottom line that needs to become clear to China has to be that without a mutually satisfactory border settlement and a permanent end to these border incidents, it cannot be business as usual and the Indian market would start shrinking for them,” she added in the article.
Prime Minister Narendra Modi has repeatedly made clear in his addresses that “vocal for local” and Aatmanirbhar Bharat should be the mantra for every Indian.
India and China have had a series of dialogue post the Galwan valley border tension. Last week, India and China held the 18th round of meetings of the Work Mechanism and Consultation and Coordination on India-China Border Affairs.
As per the official statement released by the Ministry of External Affairs, both sides have reaffirmed to continue to work towards complete disengagement of troops along the Line of Actual Control (LAC).
Both sides have also agreed that it is essential to fully restore the peace and tranquility in the border areas for the overall development of bilateral relations.