India's Balancing Act with China in the Global Supply Chain
India's External Affairs Minister, S Jaishankar, has emphasized the need to engage with China, a major player in the global supply chain, while also cautioning against excessive dependence. He stressed the importance of finding the right balance to avoid domestic sectors being "hollowed out" by the influx of foreign goods.
Jaishankar acknowledged China's significant role in global manufacturing, accounting for 32-33%. However, he warned against overreliance on a single supply chain, highlighting the potential for negative consequences. He emphasized the need to consider the "bigger term implications" for Indian businesses, particularly MSMEs, and avoid becoming a market for another economy.
The Minister also acknowledged the current strained relationship between India and China due to border tensions. He advocated for a balanced approach, stating that there are "no black-and-white answers" and that engagement with China is necessary.
Jaishankar's remarks reflect India's complex relationship with China. While recognizing the importance of engaging with China in the global supply chain, India is also wary of the potential risks of overdependence. Finding the right balance between engagement and self-reliance will be crucial for India's economic future.