India Announces Huge Industry Investment Plan to Reduce Dependence on China
RIO DE JANEIRO, BRAZIL – India’s Prime Minister Narendra Modi announced last Tuesday, May 12th, a US$265 billion stimulus package – approximately ten percent of the country’s GDP – to attract foreign investment to help the Indian economy rebound from the crisis and make the current geopolitical context an opportunity for the country to rely less on China and become a new hub of global production.
Modi described the program as part of a greater effort to make the country “self-sufficient”.
“The crisis has taught us the significance of local manufacturing, the local market and local supply chains. All our demands during the crisis were met locally,” he said.
Modi’s message comes at the same time as countries around the world are trying to reduce their dependence on China, after global supply chains were disrupted with the shutdown of the Chinese economy earlier this year.
Two weeks ago, US Secretary of State Mike Pompeo said the country was discussing with “friends” like India to “restructure global supply chains to prevent something like this from happening again”.
Geeta Kochhar, assistant professor of Chinese studies at Jawaharlal Nehru University in New Delhi, said the current crisis is an opportunity for India.
India is currently trying to reduce imports from China, with which it has a trade deficit of US$87 billion. Last month, the government announced measures to encourage electronics manufacturing – long considered a strong point of Chinese companies – and even mentioned appointing dedicated teams to speedily approve companies that wish to pull out of China.
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