Page 198 - CW E-Magazine (13-8-2024)

Special Report Special Report

Focus on reducing import dependence, not easing base, many MNCs invested several- companies owning industries in other confi dence of Indian project promoters
billions of dollars in China. In spite of the countries, they are few and far between, to operate with global mindset. Most
FDI norms, on China current political friction with western compared to the massive size of China’s project promoters here seem to prefer
countries and the ongoing turbulent economy and extent of investment to focus on the Indian market, with only
trade relationships, investments by made by MNCs in other countries. Very the ‘surplus’ targeted for exports. Many
n the recent Economic Survey for Asia-Pacifi c. In short, N.S. VENKATARAMAN MNCs in China are only increasing. few Chinese companies can thus claim consider depending on exports a risk
2023-24, submitted to Parliament, India’s relationship Director It is to the credit of the Chinese govern- to be MNCs. Even as Chinese compa- not worth taking!
Ithere is clear admission of the fact with China is unlikely Nandini Consultancy Centre ment that it has ensured that the trade nies are gearing themselves to compete
that the size of Indian industry and to be sorted out at any Chennai - 600 090 war and political issues are not causing with MNCs and overseas organisations, However, the fact is that without
India’s economy is a fraction of China’s. time soon. Email: nsvenkatchennai@gmail.com any discomfort for MNCs operating in China continues to be a recipient of entering global markets in a signifi cant
to identifying other options for boost- the country. technology inputs in several fi elds from way, boosting India’s industrial growth
The Economic Survey has also In such circum- ing India’s industry and economy and abroad, mostly indirectly by overseas could be near impossible. What is needed
pointed out that India’s import depen- stances, easing FDI norms for China to fi nd ways to reduce India’s import One striking factor that cannot be companies setting up ventures in China. are proactive government policies to
dence on Chinese products in critical would amount to giving that country’s dependence on China. ignored is that the technologists, attract investment by MNCs and over-
sectors such as electronics, solar power, investors a fi rm foothold in India’s indus- engineers and management professionals What the Economic Survey should seas organisations in India, just like
pharma, etc. is rising, with the trade trial sector and economy, and consequently Factors behind China’s big leap in China have quietly and quickly have said China has done. India too has a large
imbalance between the two countries increasing India’s exposure to China to forward absorbed technology and management If India has to reduce its import potential market base, fair level of natu-
becoming increasingly unfavourable to even more uncomfortable levels. There is no doubt that industries inputs that have come into China due to dependence on China and ensure rapid ral resources and large percentage of
India. in China – whether in steel, pharma, the investments by MNCs, and have set growth of domestic industries, there is youth that can be trained quickly with a
It is also necessary to keep in mind electronics, aluminium, etc. – have all up technology-intensive projects and no need for Chinese investors to invest high level of technical and other skills.
While in FY24, India’s exports that the friction in relationship between achieved impressive growth in the R&D ventures in China. In all opera- in India. Instead, India should imitate
to China amounted to US$16.6-bn, China and USA/Western countries last few decades, not only in quantita- tions of MNCs, large number of native the policy approach of the Chinese What MNCs have done for strengthe-
imports from China to India reached is different from that between India tive terms but also in terms of techno- Chinese personnel are employed and government in facilitating MNC opera- ning China’s industrial base can as well
US$101.7-bn, implying a trade defi cit and China. In the latter, the issues are logy, operational effi ciency and quality. over the years they have gained con- tions in China in a massive way. be done for India. The ball is in the court
of about US$85-bn. In earlier years, essentially due to business rivalries and This big leap forward has been possible siderable technology and management of the Government of India and Indian
the trade defi cit was US$83-bn (FY23) trade factors relating to global market mainly due to the solid support, encour- expertise, thus strengthening the eco- MNCs are attracted to China not project promoters. There is, however,
and US$73-bn (FY22). share, and are not basic. In the case agement and proactive policies extended nomic and technological base in China. only due to the huge market base avail- one support that the Chinese Govern-
of India, however, the issues are more by the Chinese government to multi- able and availability of several mine- ment can offer to MNCs, which the
Wishful thinking fundamental and serious from India’s national companies (MNCs) largely The huge investment by MNCs rals and other resources, but also due to Indian Government may not be able in full
What is of concern is that the security point of view, as it concerns based in Europe and USA. Assured of has also had a positive impact on the peaceful labour relationships preva- measure. This is with regard to ensuring
Economic Survey has called for India’s territorial integrity. The Economic a fair deal, availability of natural ancillary industries supplying them lent. The last is thanks to the totalita- peaceful industrial relationships, and
reconsideration of India’s policy Survey has not paid adequate attention resources in China, and a huge market while adhering to global standards. rian government, which does not permit preventing corruption, especially at the
towards China as it relates to Foreign Today, several domestic companies in counterproductive trade union opera- local levels of administration.
Direct Investment (FDI) norms. China have graduated to a level where tions that may disturb industrial peace.
It says Chinese investments must be they are in a position to compete with India’s excessive import dependence on However, in recent times, there is
welcomed in India and Chinese MNCs not only in China but also China is not due to any overwhelming evidence that industrial relations in
participation in Indian industries as elsewhere. strength of Chinese companies. They India have improved, with both emplo-
promoters and equity shareholders be are only fi lling the demand – supply gap yers and trade unions exhibiting more
viewed more favourably. Chinese companies vis-à-vis MNCs in India due to the vacuum created by responsible attituded. However, in root-
One factor that should be noted is India’s inability to strengthen and enlarge ing out corruption in administration,
This view amounts to wishful think- that some of the products imported in its industrial base with the speed needed. India still has a long way to go. Overall,
ing and is unrealistic. India from China may not be made To retrieve the situation, India needs to it is surprising that the Economic
by domestic Chinese companies, but look internally, more than externally, at Survey has eulogised China, but has not
Government of India will fi nd it instead by MNCs operating in China, China’s success. focused adequate attention on the possi-
extremely diffi cult to accept such recom- though they too will be christened as bilities in India, while taking a holistic
mendation due to the geopolitical risks ‘Made in China’. Another noteworthy Stepping up industrial growth in India view of India-China relationships in
involved, particularly due to India’s point is that even as MNCs have in- The problem in stepping up indus- the short- and long-term. There is a
border issues with China. China has vested in China in a big way, Chinese trial growth in India are largely due to difference between easing FDI norms for
decided to challenge India on several project promoters have not set up pro- the inadequate investment capability; China and for other countries. But the
fronts in the coming years, to ensure it jects in other countries to any signifi cant inability to develop globally competi- Economic Survey seems to have failed
would be the dominant country in the level so far. While there are Chinese tive domestic technology; and lack of to see this distinction!

198 Chemical Weekly August 13, 2024 Chemical Weekly August 13, 2024 199

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