China drags India's manufacturing dream..!?

Amid the US crisis, china is making a huge change in the global production and investment pattern. Meanwhile, china has changed its strategy in a way that is hindering the development of India's manufacturing sector. Due to this, india is stuck in the manufacturing sector, which is prime minister Modi's dream sector, and is unable to grow rapidly. Let's see what is happening. While the global supply chain is changing in a big way due to the decisions of the US government, china is deliberately targeting and investing in some countries. In this, it is clear that it is systematically ignoring India. Foreign direct investment from china to india has decreased by 99% since 2021. China’s foreign direct investment in 2024 fell to just $4.5 billion, the lowest level in three decades.

But china has been systematically investing heavily in other countries, especially those that impose tariffs on Chinese goods. Rather than reducing its presence on the world stage through tariffs and import controls, Chinese companies are rethinking and actively investing and expanding their presence. Until now, the Chinese government and Chinese companies have invested heavily in countries such as the united states and Japan. But in the past 5 years, china has increased its investment in many projects, including factories, battery plants, and industrial parks, in countries such as hungary, Mexico, morocco, and Brazil.
In europe, hungary has now emerged as China’s favorite investment destination, with a $7 billion investment from Chinese battery company CATL and a new electric vehicle factory from BYD. china has made morocco its new electric vehicle base to better implement trade agreements made in both the US and the european union and to avoid taxation. china has adopted this new investment strategy to easily resolve geopolitical issues. This strategy of china is paying off in a big way, china has gained a foothold in the european automobile market, which is why china is imposing high taxes on cars. In order to eliminate this, instead of exporting cars from china, it is manufacturing and selling cars in europe and its friendly countries. Due to this, the sales of leading european brands like volkswagen have started to decline. Okay, let's come to india, as already mentioned, china has reduced its investment in india to a large extent. The main reason for this is the control of the central government. Meanwhile, while india is trying to become a manufacturing hub on par with china, china is doing many things to stop this, which is creating a huge crisis for India. india started the manufacturing revolution that china created in the 1990s in 2020, and india has a population on par with china and a strong economic growth rate of 6.5%. While india is at the top in all 12 stages, china is trying to spoil it. The Chinese government does not want companies like BYD and Foxconn to expand in India. Similarly, china is quietly imposing various restrictions on the export of essential industrial goods like solar energy equipment, electric vehicle parts, and electronic machinery from china to India.

China is doing everything it can to delay the development of India's manufacturing sector. This can slow down the pace of increasing India's share in the international supply chain, and in this gap, china will fill the gap in its trade with its new investments. However, china is not the only challenge to India's manufacturing sector development. There are many problems such as high import duties on components imposed by the central government, strict labor laws, and regulatory issues. For example, although apple has shifted its iphone production to india on a large scale, its total production in india has only a 15% share in manufacturing. But Apple's target of 25% has not yet been achieved. Meanwhile, vietnam has grown at a staggering rate in electronics manufacturing. Vietnam's electronics sector, which has direct support from china, is worth $126 billion, while India's is worth only $40 billion. Three times more than India. The china Plus One strategy has benefited Southeast Asian countries in a big way. Of these, Mexico, vietnam, and indonesia have registered a big growth in the manufacturing sector. This is China's power.
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Sowmiya Sriram

23/03/2025 10:17 AM