India Inc. is facing challenges in developing company culture, addressing the expectations of a multi-generational workforce, and navigating concerns around AI and job security, according to Dale Carnegie's global president and CEO.
Despite U.S. trade shifting away from China, the country still relies on China-linked supply chains, leading to higher costs for consumers and uncertain benefits in terms of improved manufacturing efficiency, according to research presented at a Federal Reserve symposium.
India has become an attractive destination for global electronics manufacturers, with companies like Apple, Cisco, and Luxshare setting up manufacturing operations in the country to diversify from China and tap into India's large market, workforce, and vibrant presence of micro, small, and medium enterprises; however, there is a need for policy intervention to ensure growth extends beyond assembly units and focuses on creating an ecosystem for component manufacturing and value-addition to move up the value chain.
India has seen an increase in its tariffs and trade policy measures in recent years, reversing the trend towards liberalization and increasing trade restrictions, which is a global phenomenon as many countries are adopting industrial policies to promote domestic production and exports; however, the effectiveness of these policies and their impact on economic growth and job creation remain to be seen.
India's adversarial relationship with China and its moves to block imports and investment from China could complicate its involvement in BRICS, as China seeks to expand the group and use it as a platform to challenge Western dominance.
Globalization is shifting towards a strategy of security of supply, with companies diversifying their manufacturing operations and seeking suppliers closer to home, such as India, in order to reduce risks and uncertainties associated with relying solely on China.
India's recent achievements and economic growth have positioned it as a rising global power, but the country must address its challenges in poverty, job creation, education, and inequality in order to fully realize its potential.
The economist Tharman Shanmugaratnam highlights India's challenges in achieving sustained economic growth, addressing social and economic disparities, and integrating with China and ASEAN. He emphasizes the need for India to focus on education, increase exports, reform employment and land acquisition laws, and take advantage of its untapped potential.
Despite efforts by the U.S. and other countries to reduce reliance on Chinese supply chains, Chinese companies have successfully expanded their presence in key markets such as cutting-edge materials and electric vehicles, making it difficult for countries to ensure their economic security.
India's economic rise is seen as inevitable due to factors such as a consumer boom, context-appropriate innovation, a green transition, a demographic dividend, access to finance, major infrastructure upgrades, policy reforms, geopolitical positioning, and a diaspora dividend, although challenges such as unbalanced growth, unrealized demographic potential, and unrealized ease-of-business and innovation potential still need to be addressed.
India's import restrictions on personal computers and laptops, aimed at boosting domestic manufacturing, have caught major suppliers off guard and may deter foreign investment.
India's record stock market valuation and increasing foreign inflows are positioning the country as a safe and attractive investment option, especially amidst the economic troubles and struggling financial markets of its neighboring rival, China.
India is set to become a global AI powerhouse, as companies like Reliance Industries and Tata Group partner with NVIDIA to bring AI technology and skills to the country to address its greatest challenges.
India is considered a superpower in terms of population and is now ahead of China, according to Azali Assoumani, the chairperson of the African Union.
India, along with the US and Europe, successfully countered China's global influence at the recent G20 summit, bolstering India's rising power and giving a boost to the US-led world order.
India's steel producers anticipate a rise in local manufacturing and a decrease in prices after the government's imposition of an anti-dumping duty on steel wheels from China, leading to increased competition and lower domestic prices.
U.S. and European firms are shifting investment away from China to other developing markets, with India receiving the majority of redirected foreign capital, due to concerns over China's business environment, economic recovery, and politics. However, diversification is unlikely to result in a rapid decline in exposure to China as the markets foreign firms are investing in are still heavily reliant on trade and investment with China.
With the right reforms, India has the potential to become the next engine of global growth, benefiting from major economic re-alignments caused by China's slowdown and the US diversifying its supply chains. Major corporations are already investing in India, recognizing its potential. However, India needs to overcome challenges such as high tariffs, infrastructure improvements, and regional cooperation to fully realize its manufacturing potential and attract foreign investment.
The Indian government is planning to rationalize tariffs on components used for making electronics goods to boost local production and increase competitiveness for exports.
External Affairs Minister S. Jaishankar emphasizes the need to move past the negative view of the West and acknowledges that the complex issues of globalization and economic inequity are not solely the fault of Western countries. He also highlights India's achievements in global initiatives and its ability to resonate with the Global South.
The emergence of a new era of Asian commerce is reshaping the continent's economic and political future, with greater regional trade, increased capital flows, and a shift towards intra-Asian investment and supply chains. This trend is driven by the growth of sophisticated supply chains, foreign direct investment, cross-border banking, and the Belt and Road Initiative, as well as the need to establish new supply chains and the rise of Asian savings and demography. The integration of Asian economies will have political ramifications, with a decline in America's economic importance and a more locally focused and less Western-facing continent.
Major U.S. companies are increasingly seeking manufacturing alternatives in countries like India to diversify their supply chains and reduce dependence on China due to the pandemic and escalating tensions between Washington and Beijing.
