Once the lockdown ends, the way the world does business is set to change drastically with countries keen to break free from China-dominated global supply chain. However, this doesn’t mean India will gain big from China’s loss. Given its high tax rates, regulatory stranglehold and higher production costs, India may lose out on opportunities thrown up by this tectonic shift.
“There will be a scramble to diversify supply sources so that dependence on one or a few countries reduces significantly. This will create enormous churn in investment patterns,” said Pronab Sen, economist and former chairman of National Statistical Commission. Sen says firms will shift mostly to east and southeast Asia as “nothing has changed to make India more attractive”.