When global supply chains got disrupted by China’s covid outbreak, Indian makers of pharmaceuticals, auto components and other goods dependent on Chinese inputs opted for self-reliance
Could our tensions with China invigorate domestic production? We have wide-ranging trade relations with our northern neighbour, which has a heavy trade surplus vis-a-vis India. This should mean it would not want trade ties with India to snap off. Substituting Chinese imports may not be very hard for India, reckon some analysts, if local manufacturing is ramped up. When global supply chains got disrupted by China’s covid outbreak, Indian makers of pharmaceuticals, auto components and other goods dependent on Chinese inputs opted for self-reliance. As relations between the two countries fray, other firms will likely follow suit. Localization has other charms as well, such as more jobs here and foreign exchange savings.
Yet, we also need to recognize that while globalization has lost traction, there is really no escape from global interdependence. No country can be entirely self-sufficient, as history has shown, since there are always some necessities of modern living that require imports. India relies substantially on foreign sources of energy, for example. While we may want to shun China, trade is a blunt geopolitical weapon
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