As the world gets ready for Donald Trump’s return to the White House on January 20th with a potential of China facing tariffs that may negatively impact its trade dominance globally, a new question comes forth: Can India rise to seize the emerging opportunities in the west ?
The trade landscape is changing in global perspectives. China’s trade surplus recently passed $1 trillion, drawing many countries into its economic influence. However, this has raised concerns in Western economies, especially in Europe, which is now rethinking its dependence on Chinese imports.
Donald Trump, who during his first term launched a trade war with China, appears to refuel itself under similar guidelines. His narrative of inducing tariffs on Chinese goods not only makes his supporters happy but also aligns with the Western commercial market hoping to diversify their supply chains. This changing dynamic creates new game plan for countries like India.
Europe’s anxiety over its dependence on China has grown over the past few years, especially since the COVID-19 pandemic exposed susceptibilities in the international supply chains. As talks regarding “de-risking” from China escalate, European nations are actively looking for alternative trade partners.
India, with its rising economy, production, vibrant tech sector, and massive workforce for sure is an absolute candidate to fill the vacuum. A simple example of this would be, Anker, world’s leading mobile charging company that has recently decided of sourcing lithium cells from India. However, the question that comes forward: Is India prepared to capitalize on this moment?
Despite India’s economy has shown pliability, infrastructure continues to be an important barrier. India will need to ensure significant investments in rebuilding its infrastructure if it is to successfully compete with China’s highly efficient transport and supply chain systems.
The “Make in India” campaign has boosted India and changed the mentality of Indians into relying on and acceptance of foreign products. This drive which is also stemmed from a nationalistic Indian vision has done one thing for sure, promoted indigenous and regional manufacturing. However, compared to China, its output is still low.
India should boost its manufacturing capabilities in order to become a competitive and more convincing alternative, guaranteeing both quantity and quality that satisfies the western and the European norms. Moreover, to keep the manufacturing strength of India run smooth, the GOI at the same time should also place its focus into the simplification of taxation and labour laws.
India has a significant advantage due to its growing and more importantly young population, also referred to as the demographic dividend. However, the nation must concentrate on equipping its people to become more efficient and meet the demands of manufacturing. Moreover, India still faces major obstacles in its acquisition of skilled workers as of 2022. According to the Ministry of Skill Development and Entrepreneurship study less than 5% of India’s workforce obtains formal skills training, comparison to nations like Germany which is over 70%. India needs to step up its efforts at vocational training and up skilling, if it wants to stay competitive in the global market, especially in high-tech industries.
While India visions itself as a recipient of being a developed nation by 2047, she has a bright future and a long road ahead, filled with obstacles and opportunities. One such arena of potential growth is the western emphasis on eco-friendly renewable energy better known as the European Green Deal, aiming for climate neutrality by 2050. India on the other hand, is well-positioned to take advantage of this demand keeping in mind, its growing vision in solar energy, wind power, and electric mobility. It would be unfair to mention its ambition. According to the Ministry of New and Renewable Energy, India projects on “achieving 500 GW of installed electric capacity from non-fossil sources by 2030”.
It is noteworthy to mention the uneasy setting between the ever-competing global ideologies of democracy and communism, rooted in the Cold War era with Soviet times in Afghanistan and the further intervention of the US. In this context, India serves as an alternative to China’s growing influence in the Asian region. As the largest democracy of the continent, India’s political values align more closely with the west, making it a suitable diplomatically in efforts to maintain regional stability.
In conclusion, Donald Trump’s re-entry into the Oval Office may signal renewed trade tensions between the US and China. Nevertheless, this comes with paired opportunities for India: to site itself as a reliable and an efficient alternative to China and to make stronger trade ties with both the US and the Europe. However, this snatch requires more than just ambition; it requires a coordinated and collective effort to overcome infrastructure, improve manufacturing and accelerate trade negotiations.
India’s keenness to flourish on this juncture monetarily while changing the global perception towards the Indian market will undergo a metamorphosis, from being looked as underdog, to now being perceived as the big giant. This will further shape the new India’s role in the global economy for years to come. With the right investments and policies, India could emerge not just as a substitute to China, but also as a global trade leader.
(The Author is PhD International Relations. Feedback: [email protected])
