Is China's Loss, India's Gain, or Vietnam's?

China is already facing a global hatred/backlash on account of spreading COVID-19.

Vietnam has opened in July-2020, as the country opens after three months of coronavirus-led lockdown. This is coming at the time when most countries, including India, are doing nothing in terms of fresh investments in the tourism and hotel industry, as it is assumed to have a zero or negative growth sector post COVID.

While on the other side, China is facing a global hatred/backlash on account of spreading COVID-19. However, it is difficult to predict the fact as to whether it was a human-made or natural phenomenon. Although, in India, we were hoping to encash in on the anti-China sentiment to shift or make India the world’s global factory. India also has the best English speaking population in Asia, and Modi, our PM, is also seen as a competent leader across the world. One of the key takeaways from Indian Prime Minister Sh. Narendra Modi’s recent address to the nation when he mentioned India to become ‘aatmanirbhar.’ India’s Minister of Transport, Nitin Gadkari, also said the recent COVID outbreak to be seen as an opportunity and ‘blessing in disguise’ for the Indian industry, as this could help shift all large-scale foreign investments from China to India.

Is India prepared?

India has already offered a land pool, which is almost twice the size of Luxembourg, big city – to companies who are interested in moving manufacturing out of China. Uttar Pradesh, one of the BJP ruled states of India, had formed an economic task force with separate agenda to woo these companies eyeing a shift. India has also stepped up its pitch to attract such investments, having already reached out to 1,000 American multinationals with excellent offers, though the results are not that encouraging.

Weak Infrastructure and Low productivity :

  1. As per the WEF- World Economic Forum, GCR( Global Competitiveness Report), India is much behind China in every Infrastructure category by a large margin. In terms of GDP, India is investing only about 30 percent of its GDP, while in China, its 50 percent of the GDP. While the manufacturing sector constitutes about 20 percent of the Indian economy, its 30 percent in China.
  2. China has probably the best reliable and everlasting physical infrastructure, which they have consistently built over the last four decades and kept on improving also. This includes the world’s most massive expressway in China and even the robust and efficient railway networks. They have seven out of the world’s top 10 cargo-ports to dispatch and receive cargo. India lags much behind and looks more like the impoverished country that it still is.
  3. Though India scores well in communication in terms of spoken English, this earlier advantage has been replaced with China also doing better in English.

Vietnam situation

India’s weak point :

India’s biggest infrastructure project – $100 billion Delhi-Mumbai Industrial Corridor (DMIC), which was intended to be developed as a ‘global manufacturing and trading hub’ – still faces legal tussles and pending approvals. After the idea was first raised in 2007, it took about four years for the Cabinet to approve it. At many places, even in today’s date, the project still awaits clearances, casting a shadow over its development. Government inefficiency continues to be a significant hindrance with delays in land acquisition, stalling hundreds of projects across the country. For India to deliver on its promise, reform on land laws is vital.

Conclusion :

Though the country gave a strong mandate to PM Modi, and lot many things were expected from the government it won’t be wrong to say that there are lot many things still required to be done to make India as the next China what India needs is the following:

  1. Precise cut to focus on to establish secure Infrastructure – India needs robust infrastructure to attract big players.
  2. Concepts like Smart city to be active and operational. These smart cities can take off these suitable investments.
  3. Country spread needs to be evened out. While the maximum population is in some places only while nearby places are totally empty so if Delhi has a significant population, but that way Neemrana which is adjoining Delhi, may not have a high-density population.
  4. India needs a big push, especially to MSME sectors, to make India a production hub. GST rates should be reduced to max. Various incentives must be rolled out to the private sector to establish India as a manufacturing hub.
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Is China's Loss, India's Gain, or Vietnam's?
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Is China's Loss, India's Gain, or Vietnam's?
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India has already offered a land pool, which is almost twice the size of Luxembourg, big city - to companies who are interested in moving manufacturing out of China. The country needs a big push, especially to MSME sectors, to make India a production hub.
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