Explained International

Reducing China’s Role in Global Supply Chain – Signs of India Gaining the Trust

global supply chain

Ever since the Corona Crisis began and the world got agitated by China’s behaviour during the distress, all big nations are focusing on diversifying their supply chain to reduce their dependence on China. India is naturally seen as a beneficiary of such thinking, as it has the ability to fulfil many of the global requirements, if not entirely replacing China in the global supply chain. All the reform efforts and the Aatmanirbhar Bharat campaign of India are seen as an effort to take a major share in global supply chain after making India self-sufficient in crucial spheres.

While all these are happening, the question was whether it is just wishful thinking on the part of India to become a major stakeholder in the global supply chain, and if the world at large also trusts India for this.

Well, a major endorsement came from the US when the Secretary of State Mike Pompeo, during his address to the virtual India Ideas Summit, said that they are indeed looking at India for a supply chain that can reduce the dependence on China.

N95 Masks – A Case in Point

Since Pompeo mentioned medical supplies, we can highlight the example of N95 masks mainly used by the people serving in medical profession. When the crisis struck, India also was in short supply of N95 masks. But it has been able to ramp up the domestic production along with the achievement of attaining self-sufficiency in PPE kits. As on the first week of July, Centre distributed more than 2.02 crore N95 masks and more than 1.18 crore PPEs. The Centre also relaxed rules to speed up the production. According to the media reports, India has already hit the surplus in face mask production including N95 masks that involve higher skill of production. The manufacturers are now waiting for export restrictions to be lifted.

On the other hand, the US also faced dire need of N95 masks when the pandemic broke out. The situation was reported to be grave as the medicos in the frontline were left to use the ordinary masks. Back in February an article in Time reflected the shortage of N95 mask as its headline went on to say There Aren’t Enough Medical Masks to Fight Coronavirus. Here’s Why It’s Not Going to Get Better Anytime Soon. It opined that over dependence on China for medical supplies like masks led to this situation.

Now, with this example, one can understand the importance of Pompeo’s statement on supply chain and placing his trust in India. Because India, amidst the pandemic, not only ensured that certain drugs in demand are in self-sufficient quantity for itself; it also met the global demand, including the huge demand from the US.

Trade and Military

The US in no uncertain terms demonstrated that if the need arises it will back India militarily. But the partnership in trade that seemed to in a long-bargain earlier also appears to be speeding up. Commerce Minister Piyush Goyal has indicated that there will be a quick trade deal between India and the US. The investment interests exhibited by the US tech giants like Google and Facebook is there for all to see.

Mike Pompeo’s statement that the US sees India as supply chain to reduce China’s dependence, thus speaks about the trust India gained during the pandemic that is assuring bouquet of opportunities in the days to come.