Global manufacturing giants have begun to look at a Europe +1 strategy in addition to their China +1 strategy to de-risk supply chain requirements and minimize production challenges, Union Finance Minister Nirmala Sitharaman said on Friday. The minister wanted Indian industry to attract such manufacturers to set up their additional base in India to source some of their production requirements locally with an eye on markets in this side of the globe.
Delivering the keynote address at the opening session of the 95th annual convention of industry chamber Ficci in Delhi on December 16, Sitharaman said the government has already brought in a lot of facilitation by introducing or tweaking the rules to make sure Indian industry can engage with those investors or industries which are wanting to move out, or remain there and search for an additional manufacturing destination.
“With regard to China + 1 strategy, countries like Vietnam, Phillippines and Indonesia are drawing a lot of attention, India is also seeing lot of attention and you can see it from the way many of the industries are relocating themselves. Similarly, the suspected long drawn recession in Europe is not going to just affecting our exports, it is giving us an opportunity (to tap) many of the investments which are there, which are now looking for a different place where the activities can continue to happen. So as much as you are preparing for the long drawn recession in the Western world, it is also the best time to work out strategies for drawing those manufacturers from there to India to source many things from here and producing many things from here at least for markets which are in these parts of the globe”, the minister said.
Sitharaman also quoted World Economic Forum data to point out that India will see 140 million middle income households and 14 million high network individual households added to the country’s economy by 2030.
“This one set of data tells us where the market and the potential lies. Industry will have to look from where it expects demand to generate from. And this is something that is waiting for you to optimally utilize. It is directly linked to what you are looking for – demand generation”, she said.
The minister wanted the industry to be prepared for the transition to greener technologies, manufacturing and products and be aware of the additional cost it may incur by way of tariff barriers created by other countries to raise funds for such transition.
“A common concern for all of us is climate. There are countries who would want to fund their transition from not so green to green production of materials, production of items like steel, where they want to fund their transition by raising tariff walls against countries which sent their products as a matter of normal exports. So when India is going to export, in some items, like steel, you will be facing tariff walls in the name of climate action plans. This is going to affect us. This is not something which I am speculating on as there are measures announced by countries”, she cautioned.
The minister also said the India’s G20 presidency will see the country showcasing its digital achievements, prowess of youth, the skilling that is going on in a major way, the new sunrise sector which are added to India’s economy etc and wanted Indian industry to utilize various forums to raise their voice, their concerns and achievements.
