US-India forum’s reports outline measures to make India manufacturing hub


The US-India Strategic Partnership Forum (USISPF) released two reports on December 7, focused on identifying strategies for India to become a reliable manufacturing hub. The reports are titled ‘Enhancing India’s Global Value Chain Competitiveness’ and ‘Shifting Global Value Chains to India’.

They were released at a virtual event, which included special remarks by Manmeet Nanda, joint secretary, department for the promotion of industry and internal trade, ministry of commerce and industry; Gaurav Masaldan, joint secretary (customs), department of revenue, ministry of finance and Saurabh Gaur, joint secretary, ministry of electronics and information technology. An interactive industry discussion was moderated by Atul Dhawan, chairperson of Deloitte India.

These reports outline how India can enhance its competitiveness in global value chains, apart from addressing current challenges related to the country’s ease of doing business (EODB).

The first report, ‘Enhancing India’s GVC Competitiveness’, highlights that in the post-pandemic world, global firms are interested in diversifying. That interest can fulfill India’s need to make its manufacturing sector more competitive under the “Aatmnirbhar” (self-reliance) Initiative while creating a number of high-paying jobs. Through its participation in global value chains (GVCs), India can become a reliable manufacturing hub, but it has to enhance competitiveness. This report offers an analysis of India’s competitiveness in comparison with Thailand and Vietnam in EODB, cost of doing business, and labor markets. It also identifies specific areas of improvement and provides recommendations for Indian policymakers.

The second report, “Shifting GVCs to India,” focuses on the reasons and areas where current gaps are, and how these gaps can be bridged through policy intervention, thereby improving India’s competitiveness. The report provides a comparative analysis and evaluation of the Ease of Doing Business (EODB) in India viz-a-viz Vietnam and Thailand specifically for moving goods across borders in the supply chain. The report focuses on the current regulatory compliance landscape in India around conformity of standards and associated challenges, description of international best practices, recommendations to address the gaps and the expected impact of recommendations on India’s competitiveness as a GVC partner.

The second report makes recommendations about conformity assessment of product standards, ensuring policy stability, improving custom procedures, and improving logistics.

The two reports assert that addressing these gaps through the adoption of global best practices in standards and customs; and ensuring a reliable policy environment with enhanced and streamlined logistics can boost India’s global share of exports, attract investments, and develop its manufacturing sector.

Dr Mukesh Aghi, president and CEO of USISPF, said “Since coming to power in 2014, Prime Minister Modi has made it a priority to enhance India’s ranking in the Ease of Doing Business Index. Furthermore, the pandemic era has disrupted supply chains, encouraging countries to focus on rebuilding resilient supply chains and economies. These two reports touch on how India has enhanced its fundamentals to improve the business environment and supply chain connectivity.”

He added that the organization is confident of the progress made and looks forward to working on future reforms with the government and private sector.

While the studies were on the way, the Indian government announced policy decisions such as the elimination of regulatory provisions of retroactive taxes, the roll-out of a single-window system and recognition of conformity assessment from foreign labs. USISPF is happy with these measures and expects these would enhance ease of doing business in India.