Mint Primer | How will Make in America impact India?
Subscribe to enjoy similar stories. US President Donald Trump’s manufacturing push is a wake-up call for countries vying to be the next China. They need to get working.
India, for instance, has to address issues such as logistics and a weak components ecosystem. Mint explains: US President Donald Trump has laid out a carrot-and-stick strategy to boost his plan to ‘Make in America’. Trump wants companies to either set up factories in America or, if they don’t, face higher tariffs on their exports to the US, he warned.
“My message to every business in the world is very simple: come make your product in America and we will give you among the lowest taxes of any nation on earth," the US president said in a video address to global business leaders at the World Economic Forum in Davos. Trump has proposed a 15% corporate tax rate for companies that make in the US. In recent decades, global manufacturing has shifted to Asia, primarily China and, to a lesser extent, to Vietnam, Indonesia and Malaysia.
They make everything from electronics to air cons, shoes to t-shirts, for global markets, relying on a complex multi-country web of suppliers. Hi-tech manufacturing, like chip-making, is already scaling up in the US. For finished goods, there’s adequate global supply.
Unemployment is low and capacity constrained in the US. Contract manufacturers will be reluctant to shift base immediately as it entails fresh investments, and higher US labour costs may offset gains from sops. Read more: India must wake up on basic R&D for technology before it gets too late Global companies owning products and intellectual property (IP) outsource manufacturing to contractors.
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