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Analysis | Modi ramps up plan to reduce India’s dependence on China with new ‘self-reliant’ campaign
- Prime Minister Narendra Modi wants to revive India’s battered economy, while also pushing to reduce imports and ramp up domestic production
- There’s a US$265 billion stimulus package, but analysts and industrialists are sceptical whether other announcements will translate to action
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When India’s Prime Minister Narendra Modi announced on Tuesday a US$265 billion stimulus package – about 10 per cent of GDP – to revive growth in the country’s battered economy, he described it as part of a larger push for Asia’s third-largest economy to be “self-reliant”.
“The crisis has taught us the importance of local manufacturing, local market and local supply chains. All our demands during the crisis were met locally,” he said.
Modi’s message comes as countries around the world attempt to reduce their dependence on China after global supply chains were disrupted when parts of the Chinese economy shut down earlier this year to contain the coronavirus spread. Two weeks ago, US Secretary of State Mike Pompeo said the country was in talks with “friends” like India to “restructure global supply chains to prevent something like this from ever happening again”.
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Analysts say India’s gambit to ramp up domestic production and curb imports – especially from China – might be driven by its lack of choices amid deteriorating economic data.
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The country has been under complete lockdown since March 25, and about 122 million people are out of work. Smaller firms who make up 30 per cent of the economy have pleaded for help to combat their financial distress.
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