Finance minister Nirmala Sitharaman, in an address to BJP’s Tamil Nadu unit workers, raised what appeared to be a rhetorical question. She asked why even finished products such as Ganesha idols had to be imported from Chinese firms. She also wondered about the mismatch between the goal of self-reliance and the trend of importing products such as incense sticks which are made locally by MSMEs.
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There’s a simple answer to it: Cost. Chinese firms have a large cost advantage on account of economies of scale. These scale economies are not something an MSME, or even bigger Indian firms, can aspire to.
Why do we need to import even Ganesha idols from China: Nirmala Sitharaman
The solution lies in reworking the current economic policy to encourage Indian firms to achieve economies of scale in production. That’s what will make a durable difference to local manufacturing. Nirmala Sitharaman, who was earlier commerce minister, knows that without an economic architecture that incentivises scale in domestic manufacturing, imports will not subside.
