Modi-Biden Summit in Tim Cook shadow; India engine whirrs on de-coupling fuel

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By Manish Anand

New Delhi, May 11: US president Joe Biden has slipped into an election gear. Prime Minister Narendra Modi too will seek third mandate next year. With Air India and Indigo signing record passenger plane purchase deals, Biden has already hailed India for creating multi-billion dollar employment opportunities in the US.

The US may just need to do a return favour to India, and early signs are now visible of a shift in the way the global supply chains undergo rejig. China de-coupling, a theoretical hypothesis until last year, has now slipped into the realm of reality.

Tim Cook, CEO of Apple, wrapped up his India visit as a rock star, opening the first retail outlet in Mumbai amid enthusiastic crowd. Another outlet was opened in New Delhi. He met all in New Delhi, including Modi. That summed the mood in India. The country is ready to take on China in attracting the global manufacturing giants. Cook’s visit had preceded the contract manufacturers of Apple raising their stakes in India.

Soon, there is almost a daily dose of India gaining investment commitments from the global giants. South Korean automobile manufacturer Hyundai announced a Rs 20,000 crore deal in Tamil Nadu for its electric vehicle plan. Cisco also committed over $1 billion investment commitment. General Atlantic too committed to pour $1 billion annually in India. Samsung already has a huge presence in India, manufacturing almost 30 per cent of its smartphones from the country, having cut down its China base substantially in the last one decade.

The US-China rivalry is also setting up the shift in the global supply chains. The $53 billion Chips Act of the US mandates that the American defence industry is not dependent on foreign suppliers. India in the meantime is raising its chip manufacturing capacities, with two big-ticket foreign direct investment-backed proposals taking shape in Gujarat and Karnataka with the involvement of Taiwanese and Israeli firms.

CNN in an news analysis stated that the Biden administration has embraced India’s expected growth with unbridled enthusiasm, while quoting Donald Lu, the US Assistant Secretary of State for South and Central Asian Affairs that Washington “wants to be part of Indian economic miracle”.

India will be the fastest growing economy in the world, according to the International Monetary Fund, and the South Asian nation is slated to overtake Germany as the fourth largest economy in 2026 and Japan as the third biggest economy in 2032. India is aiming to be a $30 trillion economy by 2047.

The Biden-Modi Summit next month, thus, is being seen by commentators in the backdrop of definitive partnership between the two countries to fashion a shift away from China as part of the Quad declaration in Tokyo for a resilient and reliable global supply chains.

Still, not all are gung ho of such a prospect, as India’s former foreign secretary Shyam Sharan said in an interaction at the India International Centre that there remains no dilution in the commitment of the western nations’ stakes in the Chinese manufacturing. Economists such as Kaushik Basu have been red-flagging bottlenecks, including logistics, for India to press the accelerator button to hit the economic milestones by 2026, 2032 and 2047.        

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