Thank you dear subscribers, we are overwhelmed with your response.
Happymon Jacob in the social media commented that Modi was snubbed by the Chinese President Xi Jinping by not participating in G20. He also elaborated that India being dependent on China for many important industries and must put up with the snub. His comment initially stirred -angry response from many people but the fact is India economic engine requires Chinese fuel.
However, assuming he is correct, I propose that we use this as an opportunity as a country to plan and execute a response that will extricate away from Chinese dependence. The top imports from China are electronics (31B USD), pharmaceutical raw materials(13B), and industry equipment (22 B) (https://statrys.com/blog/chinese-india-imports). The other imports are -two to three billion dollars and in multiple areas which we may want to wean away over a period but not urgent.
However, dependence on the big-ticket items like electronics, industrial equipment, and pharmaceutical raw materials, is national security threat. Taking the cue from Mr. Jacob who said Chinese can choose to cripple Indian economy by not exporting the key items, which is present and clear danger to us. The chances of Chinese doing that, is very remote, but I want to give Mr. Jacob the benefit of doubt that he may have insight with his Chinese association. Also, China was making incursion into Galvan when we are fighting peak Covid-19 and going through worst crises. A cold and calculating CCP will not have scruples to exercise its available tool including banning export even it meant hurting themselves.
India should treat this as a national security issue and address it in war footing. What tools we have, should we treat this as a national security issue? We have the PLI schemes, the DRDO reorganisation, public sector, tax discounts to private sector industries, and import duty to dissuade imports like laptop. We should identify all the industries of heavy import Chinese national security import substitution category and bring them under national security purview.
The current committee on DRDO reorganization must add a nodal agency that will focus Chinese national security import substitution – this may be applicable for industry equipment and electronics import substitution. The PLI scheme along with the nodal DRDO agency, university should focus on raw material substitution / process with tax brakes to compensate for higher cost. The pharmaceutical private sector should utilize this and use as an opportunity to become self reliant and create employment opportunities.
Finally, personally I have worked on an import substitution in 1991 when India had foreign exchange crisis and developed new product and sold to the market. The necessity is mother of invention, national threat is an important driver. Our vaccine success, our space success, and aircraft manufacturing success including Tejas should give us enough confidence that we will be able to achieve this goal. One other item, we can bring this under the Prime Minister office like this space program so that it gets enough budget and attention. Finally, this should be treated as an investment against Chinese government choosing to cripple India’s economy at its will. We know the progress will be slow on these items but with correct admin and revenue tools in the next five years we can address this issue. We should thank Mr.Jacob if a progress happens.