Can India decouple from China? Geopolitics and the bid for self-reliance
By Dr Priya Chacko
Concerns over India’s economic dependence on China have been exacerbated by the COVID-19 pandemic and recent India-China border tensions. This has caused India to push towards a decoupling from China in critical sectors like pharmaceuticals and electronics.
The Indian government has implemented various protectionist measures to increase India’s self-reliance under Prime Minister Modi’s ‘Atmanibhar Bharat Abhiyan’ program to limit Chinese apps, FDI and imports.
There has been a reboot in domestic active pharmaceutical ingredient manufacturing. The government has announced schemes to increase domestic electronics manufacturing capacity.
India has engaged in previous quests for self-reliance in reaction to geopolitical challenges, however, these past attempts have fallen short due to an insufficient policy framework to support them.
The current push to expand domestic manufacturing faces challenges including labour shortages, a deepening demand crisis, insufficient government support and mis-directed policy priorities.