Make in India Mission in Danger?

[00:00:00] Make in India, our motto to kill China's influence on the Indian markets are path to Atmanerbharta.

[00:00:07] This make in India rocket ship was steering through the sky reaching new heights, out

[00:00:12] a roadblock.

[00:00:13] The World Trade Organization, WTO's recent ruling against India, what's the new ruling

[00:00:19] and how will it impact our make in India mission?

[00:00:23] Let's take a look.

[00:00:24] Well, it all goes back to 2014.

[00:00:27] These goods had taken over the Indian market because they were sastra, Sundar and Tikal.

[00:00:33] Indian brands faced tough competition and saw declining sales.

[00:00:37] We had to do something.

[00:00:38] We could not let China grow at our cost.

[00:00:41] And so make in India was born.

[00:00:44] Under this mission, we launched several product linked incentive schemes to encourage more

[00:00:48] companies to set up manufacturing plants in India.

[00:00:52] In India, it could not succeed without a focus on stop China.

[00:00:58] You see if Chinese mobile phone companies kept importing cheap phones or cheap phone parts

[00:01:04] into India, our home grown products would still be at a disadvantage.

[00:01:09] So we levied heavy import duties on electronic items like phones, smart phone components, etc.

[00:01:16] To make imports expensive.

[00:01:18] Now we weren't just importing from China.

[00:01:21] We were also importing from the EU, Japan and Taiwan.

[00:01:25] These countries were not happy with the import duties because they would reduce their exports

[00:01:29] to India.

[00:01:30] In fact, the European Commission said that approximately 600 million euros of its exports were directly

[00:01:37] affected by India's tariffs on an annual basis.

[00:01:41] What did it do?

[00:01:42] Appeal to the WTO.

[00:01:45] And what did the WTO do?

[00:01:47] The WTO's orders say that India needs to remove these duties.

[00:01:51] Why?

[00:01:52] Well, long, long ago in 1997, India had signed an agreement called the Information Technology

[00:01:58] Agreement.

[00:01:59] This agreement says that all the signing countries will not impose tariffs on ICT products mentioned.

[00:02:06] Now back when this agreement was signed, we didn't have a lot of the fancy electronic

[00:02:11] equipment we do now.

[00:02:13] So we can still impose tariffs on these new products then.

[00:02:17] Nope, this agreement was allegedly amended by the WTO later.

[00:02:23] And as India had not objected then it was assumed that we had accepted the amendment.

[00:02:28] So long story short, we can't technically add tariffs on a lot of electronic products.

[00:02:34] India is going to file an appeal to the WTO.

[00:02:37] We are super confident that we can convince the WTO what if we can't?

[00:02:43] That's the problem.

[00:02:44] If we can't convince them, it could jeopardize our make in India mission.

[00:02:48] You see if there are no restrictions on imports of smartphones or smartphone components, there

[00:02:53] will be two problems.

[00:02:55] First foreign companies who were investing in India and setting up manufacturing plants may

[00:02:59] stop doing so.

[00:03:00] And second Chinese manufacturers who are now manufacturing in India could once again

[00:03:05] go back to importing from China.

[00:03:08] But growth of this industry could stall and lots of jobs could be lost.

[00:03:13] We would go back to square one if we lose this.

[00:03:17] We went from importing 92% of India's phones to manufacturing 97% of phones sold in India.

[00:03:24] Our mobile exports have finally crossed the $10 billion mark.

[00:03:28] All of this progress could be fiped out.

[00:03:31] What's worse, this may trigger a domino effect.

[00:03:34] The whole electronics industry will face the consequences.

[00:03:37] Yep, we're kind of in a rough spot right now.

[00:03:40] We can only hope that the WTO will listen to us.

[00:03:44] If not, we'll have to re-strategize our electronics manufacturing plan.

[00:03:48] We'll have to figure out other ways to promote Indian brands and become art manoeuvra.

[00:03:54] What is your take on this?

[00:03:56] What do you think India can do if the WTO doesn't listen to us?

[00:04:00] See you in the next episode, Jay Hind.