INSUBCONTINENT EXCLUSIVE:
India has also become far more rational about evolving supply chains | Photo: Bloomberg4 min read Last Updated Sep 09 2024 | 8:47 AM ISTBy
suggestion that India could do better by joining the Regional Comprehensive Economic Partnership, the giant trade agreement that spans the
10 member states of the Association of Southeast Asian Nations alongside their partners in East Asia and Oceania.
India took part in
RCEP negotiations for years before dramatically pulling out at the last minute
A US-led move toward greater economic integration seems entirely unlikely
rational about evolving supply chains
Given the sheer heft of Chinese manufacturing, it would be absurd to maintain policies that essentially ignore the gravitational pull of the
mainland.
If you intend to offer an alternative to China in global value chains, you first need to participate in them
Every time a new trading power has supplanted another, it has done so with the compliance of the corporations, investors, and traders of the
British investment industrialised the US in the 19th century
In other words, local producers are already pretty exposed to Chinese competition through trade with Southeast Asia, but without any of the
benefits of participation in RCEP, from increased investment to export markets.
Politically, India is far more distrustful of China than
But it has also begun to reconsider its approach to investment from the mainland and Hong Kong
Some restrictions have already been lifted
Senior policymakers have admitted that setting up manufacturing ecosystems without investment and knowhow from the Chinese private sector
might be impossible.
Nobody in government has yet talked about revisiting RCEP
step.
Things might be different if India had the kind of surging private-sector investment or job growth that could sustain high domestic
Or if it had shown greater enthusiasm for integration with partners in the West, particularly the European Union.
But neither is the case
For India to keep growing, it will need trade
And it will need to become part of value chains that, for the foreseeable future, will have a large Chinese component
piece, and these are the personal opinions of the writer
They do not reflect the views of www.business-standard.com or the Business Standard newspaperFirst Published: Sep 09 2024 | 8:41 AMIST
