India’s national investment promotion agency Invest India has bagged the 2020 United Nations Investment Promotion Award that is given by UNCTAD. Some of the past winners of this prestigious award have been Germany, South Korea and Singapore which are now recognized as highly adaptive lucrative countries for strategic investments. India under the able guidance of PM Modi envisions achieving the same. The current geo-political and geo-economic environment has been marked by China’s wolf warrior diplomacy and debt trap policies that have created a conducive environment for India to present itself to the world as a preferred investment destination.
PM Modi has adopted a new approach for the given objective that has within its ambit development plants such as Make in India, Skill India, Digital India and the strengthening of the Intellectual Property Rights (IPR) Regime. All these policies have been skilfully coordinated to promote digitalization of the supply chain, gradual shift to additive manufacturing as well as a robotic automation. Integral to these objectives are the achievements of simplified and improved business procedures (ease of doing business), the introduction of the GST, de-monetization as simplification as well as rationalization of the existing rules and enhanced thrust of the IT related services to enhance the governance. Further, adoption of the best management practices such as business immunity platform and the creation of COVID 19 response teams to directly reach out both to the supplier as well as to the stakeholder have been now recognised as initiatives that the country has achieved to attract the foreign investments.
Taking these initiatives further, the government is now looking forward to collaborating with the private sector to have joint ventures in other countries. Over the years as the above initiatives would reap results, an outlet for excess domestic production would be required. The search for new opportunities and markets would be fulfilled through the Indian joint ventures mentioned above. This holistic vision of PM Modi, if systematically synergised with the investment destination objective could also increase the employment opportunities of the Indians in other countries. This is important because by 2050 India will be a truly ‘young nation’ with average median age of 37.3 years. The workforce of the country is competitive as compared to its other counterparts elsewhere in the world; it would leave no stone unturned to increase its value further in the international market. In the above context, attention has to be given to both ‘Make in India’ as well as ‘made in India’ which involves both making India a preferred investment destination as well as popularising the Indian products abroad so that the less technical skillful force of the country does not lose out in terms of employability. The National Infrastructure pipeline that aims to increase the opportunities for the development of infrastructure to attract FDI and the scheme of Production Linked Incentive (PLI) to increase the entrepreneurship, as well as investments in the country, stand as a witness to the efforts of the government to make efforts to be a major economic player in a very uncertain geo-economic and geo-political world. Through these efforts, the overall objective of the government is to retain the existing workforce in the current industries they are employed in (especially the cottage and domestic industries) and to create opportunities for the employable workforce that would soon be ready over the next few years and decades. It is because of these efforts that while there were economic relocations from important manufacturing hubs throughout the world during the COVID 19 pandemic, India witnessed an uninterrupted flow of foreign capital. Indeed, the policies currently being adopted are visionary in nature and undoubtedly would serve as an important edifice upon which a ‘New India’ would be built which aims to put the country on a world map as a manufacturing hub.
Caution against the Chinese ‘economic infiltration’
As the government aims to attract foreign investments and has relaxed the economic conditions therein, it has to be extremely cautious of the increasing Chinese investments in India. The Chinese firms, experts opine, have been successful in escaping tight scrutiny in India which can lead to dependencies on China as it has been witnessed in the U.S.- China geo-economic tug of war. Another reason for this is the strong inter-linkages between the objectives of the Chinese state-owned and private business firms. The civil-military integration component has been a clear cut policy adopted by China through its ‘Go West’ policy as well as its circular lending to almost all of its debtors, a possible Chinese economic infiltration with ulterior motives cannot be ruled out. If one closely observes the U.S.-China economic tug of war, the reluctance of the part of the United States to take a firm stand against Beijing is due to the latter’s investments as well as the quantum of the lending from China.India has to be cautious against such adversaries,especially after the Galwan valley clashes.