HM Wilkins Imperial says the pandemic has revealed flaws in Global Value Chains (GVCs), which were already under transition, exposing a window of opportunity for India to claim dominance over the global manufacturing sector.
A recent White Paper report by the World Economic Forum, has highlighted India as a potential priority manufacturing location for global sourcing markets. Analysts at HM Wilkins Imperial say the Covid-19 pandemic has acted as a catalyst to three megatrends upsetting Global Value Chains, namely, climate change and the necessity for sustainable eco-models, emerging technologies spanning both product and digital networks, and the reconstruction of globalization. Both independently and as an amalgamation, these three trends have been working to reform the creation and distribution of value along supply chains, with the transition finding acceleration as a result of the pandemic.
Experts at HM Wilkins Imperial have pointed to findings in the paper that suggest India is well positioned to benefit from these shifts in GVCs. There are three intrinsic upsides for India. Firstly, India holds substantial potential for domestic demand. Economists at HM Wilkins Imperial have forecast the consumer populous to grow by 300%, from 1.5 trillion people in 2019 to 6 trillion people in 2030 – predominantly attributed to a growth in their middle class. A growth in their middle-income consumer market lends to massive opportunity for their manufacturing sector to appease demand. Secondly, the Government of India has placed significant emphasis on driving manufacturing growth for some time. In the past, this growth was hindered by lack of investment, but recently they’ve hit a turning point, with increased punt by Government programmes (like Make in India and Atmanirbhar Bharat, “self-reliant India”) to attract greater investment. Thirdly, India carries a unique demographic edge on other nations, with analysts at HM Wilkins Imperial projecting the country’s labour force to be the most globally plentiful by 2030. Their population that falls within the employable range is estimated to grow to 1.03 billion by 2030, exceeding forecasts of 987 million for China and 218 million for the US. Furthermore, the labor in India is far more attractive at a much lower wage rate than that of competing manufacturing hubs.
Analysts at HM Wilkins Imperial have all eyes on India, as it holds the potential to monopolise global manufacturing in the years to come.