Comments
India can be a beneficiary of a geopolitical realignment and become the world’s counter balance to China, whose dominance in the global supply chain network has proved to be a roadblock to growth since the start of Covid-19, said Anand Mahindra, Chairman, Mahindra & Mahindra.
“Unshackling ourselves from China is a good development for the rest of the world and long overdue. Nature abhors a vacuum, and other countries, including ours, will rush to fill it,” Mahindra said.
China controls one-fourth of the world’s semiconductor production and three-fourths of lithium-ion battery cell supply. It also controls 96 per cent of the world’s dry cargo, thus playing an important part in the global supply chain industry.
China, Taiwan tension
However, with tensions brewing between China and Taiwan and the ongoing threat of Covid-19 lockdowns in Chinese cities, companies are keen to adopt the ‘China+1’ strategy to de-risk themselves from the vagaries of China-led uncertainties.
In December, the Indian government approved a $10-billion incentive plan to boost semiconductor manufacturing in the country to establish itself as a global electronics production hub. Companies have already committed investments of more than $4 billion in creating fresh capabilities for semiconductor manufacturing in India.
“We (India) are going to be the beneficiaries of a geopolitical realignment in threat perception. For the last few decades, all roads led to China. But there has been a change in the situation. China’s geopolitical ambitions and growing economic dominance are spooking the West,” Mahindra added.
Mahindra highlighted that one of the main reasons for the long waiting periods for delivery of M&M vehicles was the non-availability of semiconductors. He pointed out that the crash of the global supply network was in the China-dominated network rather than the ‘true global supply chain’.
“There is likely to be a significant supply chain restructuring. Companies and countries will look for alternative supply sources. This will create pockets of opportunity around the world. There is likely to be a significant supply chain restructuring, and India may well be one of the beneficiaries of this ‘sourcing’ diversification,” Mahindra added.
Mahindra quoted the US Foreign Secretary Antony Blinken who called China “the most serious long-term challenge to international order” and proposed, among other things, “to align with partners with shared interests who are opposed to China’s overseas development policies.”
“That is India’s cue. We can be the balance against China. We can be the new player in the supply chain. The situation is rife with opportunities. We have but to seize the day,” Mahindra added.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.