Can India’s economy over take China in coming years?
With the Covid-19 pandemic infecting millions of people around the world, China is facing a global backlash, especially from the United States. It has created a cold-war situation between the two, where India is siding the US. Despite the strong anti-China sentiment, the Indian government can no way stop the Chinese market.
Indian Market cannot afford to keep China out of its markets as Chinese products are fairly cheap and have helped low-income groups to improve their standard of living. The country’s products are not just cheap but also durable and well-aligned to other country’s needs. This formula has helped Chinese production experts take over even Euro-American markets. Although, China is known to be the birthplace for Coronavirus, which is uniting its enemies- India, the US, Japan, and Australia. But, there are very low chances that they can stop its goods and services all over the world, including their own countries, in the post-COVID world.
Focusing on India, it still hasn’t prepared its labor force to challenge the Chinese skilled labor force. Also, the question arises, is India capable enough to produce goods and commodities as inexpensive as China?
China has its rural industry which is that independent that it can produce goods for all sorts of cultures and commercial markets. There is no rural industry in India. While announcing plans for post- corona economy, Narendra Modi talked about establishing cottage industries. But there are no skilled laborers in rural India to produce goods for the global market’s tastes. How will this happen then?
Not to forget, Chinese growth has been driven by some of the world’s largest investment rates. This has made possible high –speed rail lines, infrastructure revolution of new cities, ports, airports, and manufacturing muscle for the country. Now, China has become the world’s factory for more than 20 years. Its ability to quickly and efficiently move what it produces domestically and around the world has played a major role in its growth miracle.
Today, India lags behind China in three dimensions: investment, infrastructure, and manufacturing. India has barely scratched the surface on all these. China invests about 50% of its GDP, while India does only 30%. Manufacturing is about is just 20% in India, while in China it’s about 30%.
India lags behind China a lot in the development. It looks like a poor country in major parts, where China has one of the best infrastructures around the world.
But, if India starts taking things seriously it can be a real opportunity. It is a known fact that by increasing investment, improving infrastructure, and growing economic output, it can be a true path to growth if the nation is patient enough to follow.
The ‘Make in India’ initiative is so promising as it does not rely on the Indian government. Launched to surpass China in direct foreign investment, ‘Make in India’ calls for global firms to increase their financial commitment to India. The innovative firms as diverse as Lenovo, Samsung and Boeing have publically supported this initiative, proving that the private sector is ready to step in.
Only thing is that private firms won’t act until it is more confident about politics and this scheme. Taking this into consideration, the government first has to give confidence to them for further progress to be made.
There is a lot of potential that India has. The raw material that the nation is so rich for any production. The challenge now is to use it effectively by all means.
All to say, to challenge China, it means unlearning many things and re-learning new things for India to take over this nation in terms of economy.