The G20 presidency has opened up opportunities for the country to emerge as a prominent global manufacturing centre
Updated On – 10:32 PM, Wed – 4 October 23
By Dr Brajesh Kumar Tiwari
India, as the host, effectively facilitated a constructive G20 Summit and also provided a new direction for global economic contacts. During its Presidency, over 220 meetings were organised across 60 cities, and over 1 lakh people representing around 125 nations visited the country. The G20 possesses a significant presence in the global market given the combined contributions of its member nations, which account for 85% of the global gross domestic product (GDP), 75% of global trade and cover around two-thirds of the global population.
The summit took place at a critical point in India’s developmental path, where the country enjoys a favourable position compared with several other nations, including China. The event included the 10 largest economies worldwide, as measured by their economic size.
Economic Capabilities
The principal objective of the G20 meeting is to foster cooperative economic initiatives among important industrialised and developing nations. The outcomes of this event will enable India to forge substantial economic partnerships and create new business opportunities, thereby contributing to global market expansion and aligning with the objectives of the Make in India campaign.
The growing confidence of global leaders in India’s economic capabilities would support the country’s ambition to position itself as a preferred trading partner and effectively meet the global demand for its goods and services. India has emerged as a significant proponent of climate policy. The programme focused on a range of key topics, including manufacturing, technology, railroads, aviation, infrastructure and green energy.
An agreement has been reached to establish an International Economic Corridor. This plan represents a groundbreaking economic corridor with the active involvement of India, the United Arab Emirates, Saudi Arabia, the European Union, France, Italy, Germany, and the United States.
At present, the pricing of our nation’s goods is relatively elevated in comparison to China. Following the completion of this corridor, our competitive advantage will be enhanced. The implementation of this corridor will result in a 40% reduction in transportation charges. The Indian corporate world will directly derive benefits from this. The creation of this economic corridor will not only result in time-saving advantages in conducting business with India but also contribute to the augmentation of economic strength.
Numerous substantial initiatives have been implemented to improve connectivity and essential infrastructure, including the establishment of maritime and railway links, inside this corridor. The completion of the corridor is expected to bring significant benefits to micro, small and medium enterprises (MSMEs) through reduced freight prices for import-export activities. As a result, it is anticipated that these businesses will experience a significant increase in their commercial operations.
Shutdown Impact
Despite the extensive efforts and available prospects, several problems persist in the wake of the nine-year Make in India campaign (25 September, 2014). Regrettably, the programme has not succeeded in revitalising the manufacturing sector as anticipated, nor has it adequately fulfilled its employment support objectives. Furthermore, despite the extensive endeavours to foster self-employment, the rate of unemployment has reached an unprecedented level not observed in the past four decades.
However, it is important to note that this phenomenon did not occur suddenly or in a short period. The closure of a corporation results in the termination of employment for a significant number of individuals. In the past five years, a number of prominent corporations, including Ford, General Motors, MAN Trucks, Fiat, Harley Davidson and UM Motorcycles, have made the strategic decision to withdraw from the Indian market.
According to the Federation of Automobile Dealers Associations, the aforementioned departures led to a significant reduction in the workforce, with around 65,000 employees being laid off. Additionally, the dealers had a substantial financial setback, with an estimated loss of Rs 2,500 crore in their investments. The industrial industry has significant challenges because of the extensive documentation requirements associated with labour, land, and environmental clearances, as well as stringent rules and policies. The intricacy of taxation and Customs rules is such that the cost-effectiveness of importing some goods, such as medical equipment, surpasses that of domestic manufacturing.
Deficiency in Skills
According to a survey published by the IDC in 2021, a significant proportion of organisations, over 74%, continue to face a deficiency in skills, impeding the progress of innovation on a broader scale. India’s position in the United Nations Development Programme’s Human Development Index is a cause for concern, as it now stands at 132nd out of 191 countries.
On the one hand, Indian enterprises are confronted with a significant scarcity of trained labour, while on the other, the nation harbours a substantial number of educated individuals who are unemployed. At present, it is seen that a mere 45% of those who have received training in India possess the necessary skills to be employed. Additionally, around 4.69% of the overall workforce has undergone vocational training, highlighting a significant disparity between the skills possessed by the workforce and the demands of the job market within the country. In the foreseeable future, it is projected that India will account for 25% of the world’s working population.
In the given circumstance, it is imperative that we prioritise the acquisition, enhancement and updating of skills among our younger population to effectively fulfil our worldwide obligations. Given the widespread integration of artificial intelligence (AI) in various industries, we must provide the younger generation with educational programmes focused on coding, AI, robotics, the Internet of Things (IoT), 3D printing and drones. This will help them to not only excel in the workforce but also navigate and thrive in a global context.
After the G20 Summit, India finds itself presented with a significant chance to establish a lasting legacy of economic prosperity. Moreover, India can rely on the assistance of its allies to aid in the realisation of this objective. India possesses a competitive advantage over other large nations due to its local entrepreneurs and substantial middle-class population. It is necessary that we redirect our emphasis towards the fundamental component at hand.
India has the potential to emerge as a prominent global manufacturing centre in the future, as there is a growing interest in diversifying from China due to many factors. There exists a necessity to liberate the manufacturing sector from onerous regulations. India is now the fifth-largest economy globally and is projected to surpass Japan as the second-largest economy in Asia by 2030.
