TEI Watch丨Can manufacturing sustain India's great power ambitions? www.deekpay.com

## India: Great Power Ambitions and Manufacturing Dreams In recent years, the geopolitical and economic status of the Indo-Pacific region has been increasingly elevated, and India, with its geographical advantage, sees this as an excellent opportunity for its own emergence and has set the ambitious goal of becoming a developed country by 2047. The future of India's manufacturing sector, the cornerstone of the country's economy and an important expression of its comprehensive national strength, will largely determine the path to realising the Modi government's great power ambitions. First, India's "big country dream" The Indian Ocean is a strategic position, connecting the world's major shipping routes, is the road of global commodity transport. In recent years, the Indo-Pacific Sea has become a global commercial centre, but also become a strategic place for the big powers to play. It is estimated that the Indo-Pacific region carries 65% of global trade and contributes 60% to the global GDP. as the centre of the Indian Ocean, India's strategic self-confidence is constantly rising. In 2018, Prime Minister Modi declared at the World Economic Forum in Davos that he wanted to make China a catch-up target. in 2021, on the 75th anniversary of India's independence, Modi re-emphasised the development of the domestic manufacturing sector and set the goal of becoming a developed country by 2047. Four years later in 2022, India's second quarter GDP growth rate was a whopping 13.51 TP3T, overtaking the UK to become the world's fifth largest economy. Second, the Modi government's "Road to India" 1. Internally: Deepening reforms and reshaping the country's competitiveness The Modi Government believes that democracy, the demographic dividend and the market are the foundations of the "Indian dream". In his speech on the seventy-fifth anniversary of India's independence, Modi referred to India as the "mother of democracy". The Modi government has put forward the "Amrit Kher" vision, which sees the next 25 years as a new beginning for India's development, promises to remove all traces of slavery and promote social progress, and emphasises political stability, the fight against corruption, and the importance of small and medium-sized enterprises (SMEs) and the development of digital technology as the direction of reform. In 2020, in response to the impact of the New Crown Epidemic, India had launched the Atma Nirbhale Bharat Economic Plan, which aimed to enhance economic dynamism, promote infrastructure development and create a vibrant society. In recent years, the Government of India has also adopted a series of production-linked incentives to encourage business development and job creation. These incentives have focused on pharmaceuticals, electronics manufacturing, medical devices, telecommunications, food, home appliances, textiles and other sectors. 2. External: Widening alliances and seeking international dominance The Modi government's foreign policy reflects pragmatic realism, emphasising the need to use every opportunity to defend its interests. Former Foreign Secretary Jaishankar summed up India's foreign policy strategy as "engage with the United States, manage China, nurture Europe, appease Russia, give Japan a role, attract neighbours, expand neighbours", with the aim of achieving a "convergence towards the strategic sweet spot". In recent years, India and the U.S. have developed a common interest in countering China's rise, and the two countries have cooperated in a variety of areas, such as signing the U.S.-India Defence Cooperation Framework Agreement, participating in the Quadripartite Talks, and establishing the 2+2 bilateral framework. The United States and India have also cooperated to expand their common interests in the Middle East, and India-Israel cooperation has been strengthened. Indo-Japanese relations have also been upgraded, with the two countries setting an investment target of 5 trillion yen (about $42 billion) for the next five years. With Japan's support, India has raised its electronics manufacturing target to 2026 to become a $300 billion electronics manufacturing hub. After the Russia-Ukraine conflict, India's foreign policy has become more profit-driven. India imported large quantities of Russian crude oil and established a rupee-rupee trading system in defiance of U.S. sanctions against Russia. Although India's foreign ministry responded that it was not subject to U.S. pressure, it subsequently toughened its rhetoric and behaviour towards Russia and joined the G7 in condemning Russia. India eventually opted out of the trade negotiations for the Indo-Pacific Economic Framework IPEF introduced by the Biden administration. III. India's Challenges While India has demonstrated great power ambitions, the gap between its own strengths and its goals remains. 1. Strategic risks The so-called democracy, demographic dividend and market demand alone can hardly guarantee India's "freedom of action". India lacks a top-level strategic design and is unable to formulate a strategic plan to lead economic development, and it is even more difficult to implement it effectively. 2. Weak industrial base and supply chain There is a big gap between India's industrial base and supply chain level and its goal. Electronics manufacturing is a capital-intensive industry, and India has high costs of capital investment, land and electricity. India's energy resources are poor, and energy security challenges are severe. India's transport infrastructure is backward, logistics costs are high, and supply chain performance and reliability are also poor. India's small and medium-sized enterprises, difficult to expand the scale of production. 3. Shortage of financial resources India for its manufacturing goals to achieve the development of radical support programmes, but its fiscal funding shortcomings, public debt has reached a high level of emerging markets. Whether India can guarantee enough fiscal expenditure to support a large-scale stimulus programme is a real problem. 4. High dependence on the defence industry India's defence manufacturing capacity is weak, and military equipment is highly dependent on foreign countries. Despite a push to diversify its defence suppliers in recent years, India has struggled to break away from its dependence on Western suppliers. 5. Poor business environment India's business environment has been heavily criticised, with high import tariffs on raw materials, independence of states, bureaucracy, difficulties in enforcing contracts, and lack of transparency in tax collection all limiting the confidence and willingness of foreign investors. 6. Socio-cultural difficulties in adapting to manufacturing needs Indian society and culture are highly fragmented and lack cohesion and "craftsmanship". Factors such as the caste system, linguistic diversity and religious diversity are constraints on India's social development. 7. Labour shortage India has a low labour force participation rate and lacks skilled workers. The release of the demographic dividend presupposes heavy investment by the government, which is a challenge for both the government and business. 8. Neighbourhood tensions India's strained relations with neighbouring countries make it difficult to integrate deeply into regional supply chains. India has territorial disputes with China, Pakistan and Nepal, as well as friction with Bangladesh and Sri Lanka. India's non-accession to the Regional Comprehensive Economic Partnership (RCEP) has also raised questions in neighbouring countries. IV. Conclusion The "Make in India" strategy proposed by the Modi government has been implemented for nearly a decade, but the effect is not obvious. Although India has shown a positive willingness to reform, but the time left for India is not much. Global manufacturing development has undergone fundamental changes, the supply chain system between the big countries may tend to diverge. The road to great power will be more difficult in the future, and India's manufacturing ambitions still need to find a new position. Reference: [list of refereed articles] Author Bio: [Author Bio] Editor: [edit] Institute Profile: [Institute profile] Contact Information: [Contact details]