Focusing on FDI from China, Arvind Viramani proposes joint ventures with Chinese firms to invest and produce goods, boosting India’s exports to the US.
On Sunday, August 4, NITI Aayog member Arvind Virmani advocated that it would be better for India to attract companies from neighbouring countries to invest and produce goods in India rather than importing products from China. He said such a move would encourage local product manufacturing. The Economic Survey, unveiled on July 22, a day before the General Budget, advocated foreign direct investment (FDI) from China to boost local manufacturing and access the export market.
Focusing on FDI from China seems more promising in increasing India’s exports to the US. Also, choosing FDI to benefit from China is more beneficial than relying on trade. This is because China is India’s largest import partner, and the trade deficit with China is increasing. Given the US and Europe’s shift away from China, this localised production could also help India tap into these markets effectively.
The proposed strategy of attracting FDI from China for localised production is a significant trade-off that could greatly benefit India’s economy. It suggests that getting Chinese firms to invest in India and produce goods here is a more sustainable approach than long-term imports from China.
