Conflict of interest between U.S. President Barack Obama’s pitch for ‘Make in America’ and Prime Minister Narendra Modi’s ‘Make in India’ may arise but a ‘win-win’ situation can be fashioned if manufacturers on both sides embed themselves in each other’s supply chains, according to Mahindra Group Chairman Anand Mahindra.
“The fact that there could be a conflict between the desire to Make in America and Make in India is a very real sort of possibility...You cannot pretend that the conflict may not arise. The question then is how does one fashion a win-win?,” Mr. Mahindra told PTI in New Delhi.
Outlining the solution, he said one of the ways would be to take a sectoral approach. “In certain sectors it may make sense in Make in India approach and in others it may make more sense for Make in America,” he said.
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Mr. Mahindra said President Obama had tried to create the “win-win situation” during his trip with his announcements of USD 1 billion dollar credit line for American companies exporting to India and USD 2 billion facility for financing renewable energy initiatives in India.
“In essence, he is financing Make in India. It was an attempt to fashion win-win by saying in this sector it benefits America, because American companies provide technology and American suppliers get into the (Indian) market...
“This is one approach that you can be even handed and you say in this area ‘I am going to support Make in India, finance renewables here and the other I am going to make in the U.S. The key here is that the American suppliers will supply to renewables developers here (in India).”
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Stressing on the need for becoming a part in each other’s supply chains, Mr. Mahindra said, “The goal has to be both India and America embed themselves in each other’s supply chains. As long as trade between the two countries improves, even if they are making in America, if Indian companies are getting a chance to export components in America and sub-assemblies to them, we gain.”
Similarly, Americans need to understand that when they make in India and India grows at 8 per cent there will be enormous opportunities for American companies become a part of the supply chain, he added.
“Fortunately, India’s economy has opened up and nobody should have an objection to Make in India because we don’t now have a local content rules in most of our industries. If you assemble a car in India you can buy components from wherever you want,” Mr. Mahindra added.
Stating that the world today is a global supply chain, he said, “What looks like Make in India cannot help but involve ‘make in somewhere else’ for the people who supply here. So the question is make what, where? You cannot have 100 per cent made in one location.”