The spread of the Covid-19 pandemic worldwide has caused a considerable re-examination of the nature of globalisation. The lack of resilience of existing global supply chains has been revealed — and, as a consequence, investors, companies, and governments may be willing to invest in new geographies that may add to the sustainability of their trading networks. This has provided an opportunity to India, which Prime Minister Narendra Modi, in his address to the nation on the subject of self-reliance, was quick to highlight. Mr Modi laid stress on the point that India must become part of global supply chains. The fact that India’s failure to do so is an age-old complaint of economists in no way detracts from the continuing relevance of the ambition. Without becoming part of global value chains, in manufacturing in particular, there is little hope of expanding mass employment for those without special high-level skills. So far there is no recipe in economic history for development without mass manufacturing being one of the stages — and, in today’s world, mass manufacturing requires supply chains. India’s own demand, while substantial, is not enough to sustain the size of employment India needs. China would not have developed if it chose to depend purely on domestic demand. Unfortunately, Union Finance Minister Nirmala Sitharaman did not mention India’s inclusion in global supply chains as one of her policy objectives and initiatives. Yet it remains a vital part of “Make in India”, one without which the entire programme will falter.
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First Published: Thu, May 21 2020. 23:22 IST