Despite the government's flagship 'Make in India' initiative, the country's manufacturing sector has become even more dependent on China for critical components, machinery, and technology. Instead of growing, the sector's contribution to GDP has fallen, highlighting a fundamental gap between ambition and reality.
China has established near-total dominance over key supply chains for advanced manufacturing, including batteries, electronics, and rare earths. It is now strategically leveraging this position by implementing export controls on both equipment and intellectual know-how to stifle potential competitors like India.
The deep strategic mistrust between New Delhi and Beijing manifests as tangible economic obstacles, including the rejection of major investment proposals (BYD, Great Wall Motor), stringent visa policies for executives, and tight investment screening. This political friction directly undermines economic cooperation and efficiency.
While Indian companies are exploring technology transfer from other nations like South Korea and Japan, these alternatives come with significant trade-offs. Sourcing from these countries is 20-25% more expensive, and the technology itself may be less suitable for India's unique market and climate conditions, reinforcing China's competitive advantage.
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