Looking to the future, India must follow its own path to becoming a developed economy rather than fast-track development through a China-plus strategy, according to top former Indian diplomats at a media event last week. This refers to foreign investors seeking to decouple or de-risk their production and supply chain activities by adding an alternative manufacturing or sourcing location to China due to US-China geopolitical tensions. The US in particular is aggressively pushing such a strategy with allies like India, which stands to benefit from diversifying supply chains. But the fundamental fact remains that its economic future cannot be subject to somebody liking China, which can swiftly change, argued former national security advisor, Shivshankar Menon.

The difficulty is that this strategy is also not playing out according to the script. For all the talk of de-risking, the world’s dependence on China remains intact. The dragon accounts for 40% of global growth, while its trade with the US and European Union is booming. When Western nations talk of China-plus, they are only looking at additionality. India’s bilateral trade and dependence on China, too, is growing despite efforts to minimise it due to the ongoing border stand-off since April 2020. India’s imports are close to $98 billion. Of this, 28 categories account for $90 billion. Within that, electrical equipment and power equipment account for 50%. While there has been some progress in getting Apple to shift part of its iPhone production and attract its preferred contract manufacturers like Foxconn and Pegatron, they are in no tearing hurry to reduce their dependence on the mainland.

Asian power play: Sage observations for Delhi as it struggles for elusive strategic clarity in dealing with China

Nobody is really moving away from China except in an incremental sort of way, the speakers said, adding that due to rising domestic wages Chinese companies themselves are........

© The Financial Express