National economies are connected to global production: Sharma
Union Minister for Commerce and Industry Anand Sharma on Monday said that the process of global integration of manufacturing sector was “irreversible.”
Delivering the inaugural address at the 20th edition of the Confederation of Indian Industry’s (CII) annual flagship event, the Partnership Summit, Mr. Sharma said, “There will be attempts to reverse the process of integration, which began in the 1990s, but these will fail because businesses in the advanced countries find this beneficial to their interests.”
Mr. Sharma pointed out that in the wake of the global economic crisis, there “had been talk of looking inwards” in the industrialised countries. Quoting from a recent study, Mr. Sharma pointed out that every job that was outsourced from the U.S. created at least two more jobs in that country.
Apple’s stellar success with its iPad had been made possible by the integration of a supply chain that spanned 17 countries, Mr. Sharma observed. Similarly, Boeing’s manufacturing process was located in 23 countries, he added. National economies in many countries have become “connected” to global production and value chains in the last two decades, Mr. Sharma said.
He urged investors to take advantage of the “liberalised” regime for foreign direct investment.
“India may be a leader in software, but it has a shortcoming in the field of electronics.” Mr. Sharma urged investors, particularly those from Japan, to invest in wafer fabrication units, promising them the same terms that were being offered to the two consortia that were awarded “in principle” approval to establish such facilities last September.
Delivering the keynote, Chief Minister Siddaramaiah said Bangalore had become an integral part of the global supply chain. The Chief Minister also released CII report developing Mysore as a industrial hub. “Mysore is the new growth engine, which can complement Bangalore,” he observed.
CII president S. Gopalakrishnan said Bangalore’s location at the “crossroads” of the global value chain gave it unique advantages. He said India’s strength lay in its integration of manufacturing and services.
Chief Secretary Kaushik Mukherjee urged investors to take advantage of the policy of creating “country-specific” industrial zones, where companies from a single country can be located in a cluster. Observing that this would cut red tape, Mr. Mukherjee said, “We are ready to change land holding regulations to make this possible.” The three-day event concludes on Wednesday.