{"id":14291,"date":"2020-10-28T14:10:59","date_gmt":"2020-10-28T08:40:59","guid":{"rendered":"https:\/\/www.grainmart.in\/news\/?p=14291"},"modified":"2020-10-28T08:11:12","modified_gmt":"2020-10-28T02:41:12","slug":"long-way-to-go-before-india-can-be-considered-as-the-worlds-factory","status":"publish","type":"post","link":"https:\/\/www.grainmart.in\/news\/long-way-to-go-before-india-can-be-considered-as-the-worlds-factory\/","title":{"rendered":"Long Way to Go Before India Can Be Considered as the World&#8217;s Factory"},"content":{"rendered":"\n<p>Despite the tense confrontation with <a href=\"https:\/\/www.grainmart.in\/news\/chinas-corn-imports-hit-record-high-and-are-estimated-to-touch-7-million-metric-tonnes\/\">China<\/a> on border and rhetoric \u2018self-reliance\u2019, India\u2019s dependence on the east Asian nation remains significant. Long way to go before Indian can be considered as the world\u2019s factory.<\/p>\n\n\n\n<p>Imports from China made 14% of the Indian<a href=\"https:\/\/www.grainmart.in\/news\/pakistan-imports-wheat-and-builds-reserves-to-fight-inflation-and-shortage-in-the-wake-of-covid-19\/\"> imports<\/a> in the fiscal year ending March 2020. The number has gone up to 19% this year, showing the increased dependence of the country China. That apart, the economic support of other quad countries(Quadrilateral Security Dialogue) including the US, Japan, and <a href=\"https:\/\/www.grainmart.in\/news\/australian-food-exports-to-drop-by-10-owing-to-demand-downturn-and-trade-tensions-with-china\/\">Australia<\/a> has also increased over the past few years.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-relocation-considerations\">Relocation Considerations <\/h4>\n\n\n\n<p>Amita Batra, a trade economist at JNU, says that some firms might consider relocating from China. However, it will not be on a large scale. The covid recession has drained companies out of cash. Hence several might reconsider their relocation as diversification is neither easy nor cheap. Even if they decided to relocate, it is unlikely that they will choose India owing to issues in ease of doing business, and <a href=\"https:\/\/www.grainmart.in\/news\/farmers-overcome-labour-shortage-issue-with-direct-seeding\/\">labour<\/a> and land reforms. The disruption in the <a href=\"https:\/\/www.grainmart.in\/news\/supply-chain-most-important-during-lockdown-to-ensure-supply-of-essentials-to-1-3-billion-indian-citizens\/\">supply chain<\/a> caused by the pandemic has encouraged companies to not move their production units far away from China.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1024\" height=\"682\" src=\"https:\/\/www.grainmart.in\/news\/wp-content\/uploads\/2020\/10\/pexels-anthony-beck-4347561-1024x682.jpg\" alt=\"India's Dependency on Asian Nations is Significant\" class=\"wp-image-14327\" srcset=\"https:\/\/www.grainmart.in\/news\/wp-content\/uploads\/2020\/10\/pexels-anthony-beck-4347561-1024x682.jpg 1024w, https:\/\/www.grainmart.in\/news\/wp-content\/uploads\/2020\/10\/pexels-anthony-beck-4347561-300x200.jpg 300w, https:\/\/www.grainmart.in\/news\/wp-content\/uploads\/2020\/10\/pexels-anthony-beck-4347561-768x512.jpg 768w, https:\/\/www.grainmart.in\/news\/wp-content\/uploads\/2020\/10\/pexels-anthony-beck-4347561.jpg 1200w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption>India&#8217;s Dependency on Asian Nations is Significant<\/figcaption><\/figure>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-india-s-prospects-of-becoming-the-world-s-factory\">India&#8217;s Prospects of Becoming the World&#8217;s Factory<\/h4>\n\n\n\n<p>India\u2019s share of dependence on China is significant. However, Biswajit Dhar, another trade economist at JNU, notes that India is the only country after China that can become a low-cost production centre. Even <a href=\"https:\/\/www.grainmart.in\/news\/world-bank-evaluates-indias-gdp-contraction-above-3-20\/\">World Bank<\/a> in 2017 reported that South Asia has the potential to become the next manufacturing powerhouse if it improves business <a href=\"https:\/\/www.grainmart.in\/news\/climate-change-will-lead-to-water-wars-across-the-world-and-disrupt-agriculture-sector\/\">climate<\/a> and links to global value chains. However, India\u2019s participation in global production has declined since 2008. Its use of high-value imports to produce export commodities has increased significantly in the past few years.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-eclipse-bangladesh-before-thinking-about-china\">Eclipse Bangladesh Before Thinking About China<\/h4>\n\n\n\n<p>IMF, in World Economic Outlook report, mentioned India\u2019s slipping behind Bangladesh in terms of per capita GDP. India\u2019s GDP per capita in real terms was 1.4 times that of Bangladesh in 2016. However, it is following a downward trend since then. Notably, India\u2019s GDP per capita projections for 2019 stood at USD 2097.78, whereas it was USD 1816.04. But this year, the forecast for India\u2019s GDP per capita in current prices is USD 1876.53, which is USD 11.44 less than that of Bangladesh\u2019s projection.<\/p>\n\n\n\n<p>The gloomy forecast could be partly due to the<a href=\"http:\/\/who.int\"> Covid-19<\/a> blow and partly to India\u2019s chosen path to growth. While Bangladesh has been leveraging upon its low-skilled labour force, India has sunk in becoming an economic powerhouse of the service sector. However, the industry fails to create jobs at a commensurate pace, leaving a significant portion of the labour force untapped.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-gdp-data-suggests-indian-economy-hit-severely-by-covid-19\">GDP Data Suggests Indian Economy Hit Severely by COVID-19<\/h4>\n\n\n\n<p>While China has excellent prospects of rebound, India\u2019s GDP is projected to drop by 10.3% below Bangladesh, Vietnam, China, Nepal, Pakistan, and five other Asian economies. Kaushik Basu, the former Chief Economic Adviser of Union Finance Ministry, warned the Indian government suggesting not avoiding data. Further, he advised to take corrective action and utilize the expertise available in the country.<\/p>\n\n\n\n<p>In all, India first needs to increase manufacturing capacity to provide mass <a href=\"https:\/\/www.grainmart.in\/news\/indias-unemployment-rate-in-august-breaches-9-mark\/\">employment<\/a> and eclipse Bangladesh. Only then it will be able to compete with China to become the next manufacturing powerhouse.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>India\u2019s dependence on the east Asian nation remains significant. Long way to go before Indian can be considered as the world\u2019s factory. <\/p>\n","protected":false},"author":13,"featured_media":14324,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[2337,1866,24112,120,2835,24213,22982,12310,24211,24212,2581,24214,4010,9124,3272,2882,24210,16185,9441,24182,13050,8707,2878,4037,24109],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Long Way to Go Before India Can Be Considered as the World&#039;s Factory - Grainmart News<\/title>\n<meta name=\"description\" content=\"India\u2019s dependence on the east Asian nation remains significant. 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