New Delhi: Zoho founder and renowned entrepreneur Sridhar Vembu has started debate in India when he declared the era of globalism is coming to an end and that a study of the Chinese economy must be done to strengthen India's long-term growth strategy. His remarks have revived the debate on manufacturing, self-reliance, industrial policy and India’s place in the world economy which has been increasingly fragmented.
Vembu, who has consistently advocated for decentralized economic development, rural innovation and indigenous technological capabilities, posited that changing geopolitical dynamics are reshaping international trade and investment patterns. Countries cannot keep global supply chains stable forever, he said, so manufacturing and technological self-sufficiency are more and more important.
The entrepreneur said India’s future growth would not only depend on becoming a global services powerhouse but also on major manufacturing expansion. China’s decades of investment in industrial infrastructure, workforce development, export competitiveness and supply chain integration will be very effective lessons for India in this regard, he said.
Importantly, Vembu’s remarks do not mean that India should mimic China’s political or governance model. Rather, his focus was on understanding how China became one of the largest manufacturing economies in the world. China's success was driven by investment in infrastructure, industrial clusters, logistics, vocational education, and export-oriented production for decades at least, analysts say.
With uncertainty in global supply chains and uncertainties in business, trade and disruption in recent years, the debate on the supply chain and growth in global companies is a natural turn to a “China Plus One” strategy, as companies are looking for new manufacturing locations while still having operations in different countries. India has been a major beneficiary of that trend.
India has several structural advantages, such as a young workforce, rapidly expanding digital economy, better infrastructure and a large domestic consumer market, experts say. Government efforts like Make in India and the Production Linked Incentive (PLI) scheme, investments in semiconductor manufacturing and logistics to develop India's manufacturing ecosystem are among the most important ways to support India's manufacturing ecosystem.
But economists also note that to become a global manufacturing hub we need long-term policy consistency, reliable infrastructure, efficient logistics, skilled labor and a business-friendly regulatory environment. Making business easier, reducing compliance and investment in research and development are all very important for industrial growth.
Vembu has consistently stressed the need to create economic growth well beyond big cities. The way he has used his own business philosophy to drive rural development, to have distributed workforces and to have technology-based employment creation in smaller towns is through his own business philosophy. He believes that a sustainable regional development approach to growth will lower urban migration while supporting inclusive growth.
And the entrepreneur said India should invest more in engineering talent, manufacturing skills and innovation. Building globally competitive industries requires a solid base in technical education, vocational training and continuous research, he said.
The global economy is undergoing deep structural changes, industry observers say. Supply chain resilience, strategic manufacturing, energy security, technological independence and domestic production are central themes in governments all over the world. This has led to many countries revising industrial policies which will be placed on industrial sectors such as electronics, pharmaceuticals, renewable energy, defense manufacturing and semiconductors.
China’s rise as a manufacturing superpower has been supported by decades of infrastructure expansion, export-oriented policies, industrial specialization and large private and public investment. The fact that India’s democratic structure and economic structure differ from those in other countries is not lost on experts and policy experts that some of the lessons can be adapted to India (infrastructure, workforce development, manufacturing ecosystems and export competitiveness).
Business leaders have had a different view about the future of globalization. Some say globalization is evolving rather than ending, and trade patterns are becoming more regional and diverse. Others believe in a multipolar world and with international trade agreements still being maintained.
Vembu's comments have therefore resonated with the larger debate on India’s long-term economic strategy. And as global supply chains continue to change, policy, business and technology players in India are increasingly concerned about making India more competitive in manufacturing, technology and innovation.
Whether we are in the end of globalism is a question, as we know it is, remains to be seen. But the message of strengthening domestic capabilities, investing in industrial infrastructure, building resilient supply chains and increasing high-value manufacturing is not far off. When India is to become more developed India will have to look at these kinds of discussions in the future to shape its policy thinking and industrial strategy.
