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How India can become Manufacturing hub?

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    This shows how far an average Indian is from an average Chinese or American.
  • That is why economists repeat that India has to grow rapidly for several decades at a stretch if it wants the average level of lifestyle to reach anywhere close to the developed world.
  • BUT INDIA’S DEPENDENCE ON CHINA
  • Contrary to perception, India imports a lot of intermediate goods from China, and stopping that trade will affect our ability to produce finished goods.
  • There are sectors that are import-dependent such as automobile, pharmaceuticals, electronics, telecommunications, etc.
  • Thus move towards boycotting these goods could be counter- productive, impacting the overall competitiveness of the Indian manufacturing sector and undermining our competitiveness to export.
  • Requires Indian policymakers and businesses to put in real hard work and not resort to lazy solutions such as banning trade or raising tariff barriers.
  • REASON FOR INDIA’S POOR SHARE IN GLOBAL TRADE?
  • The first thing to understand is that India’s poor share in global trade, especially on goods, is a reflection of our acute lack of competitiveness.
  • This is the harsh truth but far too often, instead of accepting this reality, policymakers have blamed India’s stagnant exports performance on weak global demand.
  • WHAT ARE DOMESTIC BOTTLENECKS?
  • Poor infrastructure, Lack of reliable electricity, Logistical delays, Regulatory hurdles, Problems in enforcing contracts etc.
  • HOW TO REDUCE THE COST OF MANUFACTURING?
  • We need to be more sector-specific and Focus on factors of production that can make a meaningful difference.
  • The government can just revisit the advice rendered by its Chief Economic Adviser Krishnamurthy V. Subramanian in the latest Economic Survey released this year.

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