China's manufacturing prowess to bear on India's growth story: Eco Survey

The Survey has said India needs to grow at 8 per cent for about two decades to become a developed nation by 2047, but it will have to face challenges from global developments and reliance on China

Chinese manufacturing prowess and its dominance in the strategic sector will have a bearing on India's growth projection in the medium term and its march to become a developed nation by 2047, the Economic Survey said on Friday.

The Survey has said India needs to grow at 8 per cent for about two decades to become a developed nation by 2047, but it will have to face challenges from global developments and reliance on Chinese imports. 

"While the desirability of this growth rate is unquestionable, it's important to recognise that the global environment political and economic will influence India's growth outcomes," the Economic Survey 2024-25 said.

 

The survey said fundamental shifts in global economic engagement are underway with the proliferation of trade and investment restrictions. Between 2020 and 2024, over 24,000 new restrictions related to trade and investments have gone into place globally.

The survey made a case for "acknowledging the elephant (and the dragon) in the room that will have a bearing on the growth projections fundamental shifts in the global economic order combined with China's manufacturing prowess and strategic dominance".

The effects of the rise of China as a manufacturing colossus are seen in automobile (especially electric vehicles) manufacturing, mining and refining capacity for critical minerals (Copper, Lithium, Nickel, Cobalt, Graphite, etc.) and in clean energy equipment, etc.

China's rise in the global auto market has disrupted the long-term incumbents in economies like Germany and Japan, and it dominates the global distribution of critical minerals and other economic resources, creating potential dependencies for posterity.

"Courtesy of these developments, the world's modus operandi of outsourcing manufacturing to China pursued vigorously in the globalisation era is poised for a reset," the survey noted.