While a large number of infamous astrologers, psychics and crystal ball predictors try to weave a cause, effect and continue to provide us with timelines for the finalities of COVID 19 – Not a single person in this world had been able to predict that a virus would be able to shut us down both economically and physically, at the unprecedented scale and speed at which COVID 19 has taken over our businesses and households globally. While no offence is meant to the abilities and power of conviction of the many clairvoyants, this pandemic has triggered the flight or fight mode in most of us and we have had to re-think our priorities, the way we contribute and view the world we live in, disrupt our well-laid plans and rebuild our modes of livelihood and most importantly give a newfound meaning to the word ‘innovation’.
If there was ever a silver lining in a dark cloud, it is that the indestructible giants of the manufacturing world will have to also re-assess their best-laid plans. The overreliance on the incumbent non-democratic, autocratic country has led the supply chains being disrupted for several firms which had their manufacturing base there and the global economy to be stretched thin. Various industry sectors are seeking alternatives that do not limit their outreach.
Whilst there are a number of opinions that state that India cannot compete since China has had a head start of over 40 years or with other countries like Mexico or Vietnam that have certain advantages like proximity and cheap labour. The current Indian government now in its second term, from the minute they came into power in 2014, has been working towards introducing measures to attract foreign investors, removing obstacles that deter ease of doing business in India and enabling well strategies policies/reforms and its applicability to the various diversely educated states to benefit from foreign investments especially the manufacturing industry in India. Certain recommendations such as single-window clearance system, tax reforms, labour and environment reforms, dispute resolution policies, and swifter logistical and construction permits have already been implemented.
One of the key advantages is that India permits 100% FDI in contract manufacturing. This could prove to be India’s most crucial leverage, as globally businesses scurry for alternatives that provide them infrastructural dependability and optimum output. In the pharmaceutical sector itself, for basic manufacture of medicinal products, formulation development, stability studies, and various stages of clinical trials, India has a far superior edge over other nations, due to resources including manpower, technically-knowledgeable workforce, and approved production premises. A substantial 40% lower cost of operation and production is clearly the highlight for multinationals to consider India for their outsourcing needs.
Cheap and skilled labour
While cheap labour has been the brimstone of attracting manufacturing investors, to get the maximum mileage of their brands, companies are looking to outsource their manufacturing to more cost-efficient centres and yet retain their quality and brand image. India has the lethal combination of a booming population of young able-bodied labourers and at the same time has been cultivating skilled workforce for quality production.
India has always tried to create amicable relationships with other countries and has garnered more allies than enemies. Its foreign policies, partnerships and active participation in economic forums is evidence of India’s approach to the world at large as well as acceptance of various democratic reforms for the world to be enablers of each other and our diverse needs.
Strength in Numbers
The world including India is still reeling from the shock of economic lockdown, overcoming hurdles such as bringing back workforce, better infrastructure, improved implementation which will be herculean tasks for the government but India has the capability of bouncing back much faster than most nations and takes credit for being resourceful problem solvers as well as innovators.
Reshuffling the supply chain
The dilapidation of beliefs and systems that the pandemic has brought about, has shown us that prosperity for all lies in the revision of the globalization template. This provides mammoth opportunities for Indian companies to not only move towards creating redundancies but also to reduce reliance on imports and focus on large scale indigenization, which in turn can be crucial in the major reshuffle of the global supply chain.
Make in India 2.0
India is uniquely placed amongst this debacle for it has the capacity to be both effective and quality providers to the world as well as cater to the demand of the growing needs of the middle class in the country. If the manufacturing industry in India can prove that they can re-invent the wheel and take up the challenge to cater to global needs, it will efficiently make India a self-reliant nation. The government has in the past with the initiation of ‘Make in India’ and more so now, with the implementation of the Atmanirbhar Bharat Abhiyan, provide manufacturers and industrialists vast compensations to take broader and braver initiatives to attract investments in the manufacturing sector including automobiles, food, pharmaceuticals, agricultural and take advantage of the opportunities that the times have presented to us.
Old habits, die hard – but die they must
Unfortunately, the world cannot tick on emotions and sentiments, for the many who have lost loved ones and are struggling to survive, it is a very hard lesson to learn from and one that most around the world can do without, but this newfound perceptive and shift must be seized and opportunities should not be lost. With a systematic and strategic approach, India will be able to be the optimal choice for investment, a dependable source of output and become enablers of a flourishing global economy.