Amid tensions with China, domestic manufacturing in India may increase
Recently, there has been an escalation from China as a result there are tensions mounting between India and China. The COVID-19 situation combined with border situation is paving way for boosting local manufacturing. Moreover, Indian businesses making aluminium coils and sheets are now more cost-effective than the Chinese, according to analysts. The rising tensions could enhance India’s efforts to cut its dependence on imports from its northern neighbour.
Although China has emerged as India’s largest trading partner with imports accounting for close to 16% of the total, the experts said any disruption will have a relatively brief impact on domestic industry. The disruptions caused to raw material supplies from China because of the coronavirus pandemic has prepared local companies to deal with such events.
“The covid-19 situation has underlined the need to enhance deep localisation of components and most of the companies are working on that front," said Vinnie Mehta, director general of Automotive Component Manufacturers Association of India (ACMA), which represents auto parts companies.
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