China will never stop bullying its neighbours. Military escalation and de-escalation across borders will continue. India needs to reduce the power asymmetry with its neighbour and build its muscles so that it can flex them from a position of strength. This asymmetry exists across four areas—economic, diplomatic, political and military. Therefore, a holistic strategy is necessary to make India stronger and help it respond more effectively to any such future threat to the country.
Economic strength: India can build economic clout through better business planning. The aversion to large-scale industries was a mistake. To make India an economic power, we need to do mass production. It will help achieve cost leadership and beat China’s pricing. Around 80% of air conditioners, 70% of mobile sets, 60% of shoes, 74% of solar cells and 60% of premium luxury branded products in the world are now being manufactured in China. Will our MSMEs be able to scale up production and match China in pricing and quality in the global market? Maybe yes, but we need to build clusters for that—and a one district one product strategy where MSMEs can share technology, expertise and labour, and bring efficiency for mass production.
However, the best solution would be mass production by big companies, so that India can enjoy cost leadership in international markets and replace China as the export partner of many countries. India can identify 10,000 companies with a Rs 100 crore+ turnover, and have the vision to grow big and dominate the international market with large-scale production. The government can help them in exports and business by signing trade agreements with friendly countries through India’s diplomatic and strategic initiatives. The government needs to provide them loans at an interest rate of 3-4% to allow them to invest in technology and equipment to scale up their production.
Before that, India needs to address some ground issues, such as skilling of workers, making power available at Rs 3 per unit to industries (that’s the rate in China), building wide and efficient roads, rails, ports and airports to reduce transportation costs, and changing labour laws, etc. Diplomatic strength: This is one area where it is not understood why India should have an asymmetry in power. India needs to develop business skills in its diplomats. We need to skill and re-skill them to focus and achieve both strategic and business goals from the relations with the countries they are stationed in. With Covid-19, we have an opportunity to improve on the business partnership matrix and trade relations to achieve phenomenal business growth year on year, starting from 2021.
The “train the trainer” program conducted for business leaders from corporates and senior diplomats with business acumen can help sharpen their business skills, which are necessary for partnership development and signing business contracts. The External Affairs Ministry needs to assess the present skill gaps and develop training programmes accordingly. Secondly, in a world in which the US and China are more confrontational and competitive now, India needs to decide which bloc it should go with. The US has been interested in building better and stronger relationships with India as a counter balance to China, particularly in the Asian continent.
Now, FVEY countries (Five eyes Alliance—the US, UK, Australia, New Zealand and Canada) are reorienting their policies towards China as a consequence of the pandemic and looking towards India to play a dominant role in the Indo-Pacific region. It’s India that needs to respond to these global calls and take proactive measures to converge politically, strategically and economically with every country for its own benefits. And relationships with our immediate neighbours are important to maintain peace in the region. Then, we need to create a task force of MPs across political parties to engage various countries for trade and business partnerships—setting clear goals to achieve business/trade revenue growth—and aligning them to this goal of making India a super economic power.
When they visit another country, they can take 10 Indian businessmen along with them, so they can explore business opportunities and sign deals there. Political strength: Democracy continues to remain our strength as it gives us a leverage in our engagements with other larger and more powerful democracies of the world as they celebrate individual choice and freedom unlike communist China. While there are counter arguments to the above assertion citing delayed decision-making due to time wasted in arriving at a consensus or a majority, it has been proved that democracies are able to deliver citizens their rights much better than a communist set-up.
We need to strengthen our democracy by making it more mature, erudite and less raucous. Military strength: India needs to get into strategic partnerships with advanced defence powers like the US, Russia, France, the UK, Israel, Japan, and most of the China-wary countries in the Indo-Pacific region such as South Korea, Vietnam, Australia, New Zealand, Indonesia, Taiwan and the Philippines. Then we need to build our indigenous capabilities and military competence with investments in defence technologies and production. For that, we need to increase our defence budget manifold. This is the time for India to have a solid long-term strategic plan to grow stronger—economically, technologically, militarily and politically—without being overly aggressive in challenging China over a longer period of time and a larger geopolitical space.
Amar Patnaik
Rajya Sabha MP and former CAG bureaucrat with a PhD in management
Jayanta Kumar Mohanty
Delhi-based Business and Strategy Consultant & an ex-CEO of a US company
(amar_patnaik@yahoo.com)