Lt. Gen. S L Narasimhan emphasizes that India must exert considerable effort to remain competitive alongside Vietnam, Thailand, Indonesia, and Bangladesh in order to capitalize on the global 'China-plus-one' strategy. In a discussion with Ravichandran Purushothaman, former Chairman of CII Tamil Nadu State Council and President of Danfoss Industries (P) Ltd, Narasimhan highlighted India's current ranking as fifth in benefiting from the 'China-plus-one' strategy.
At the 'Annual Meeting 2023-24' of the Confederation of Indian Industry’s Tamil Nadu chapter, themed 'Tamil Nadu – The State of the Future', Lt. Gen. Narasimhan was tasked with providing the industry audience with insights into the global geopolitical landscape. He emphasized that India must enhance its domestic manufacturing capabilities to capitalize on the 'China-plus-one' opportunity. Additionally, he stressed the importance of addressing issues related to land, power, and infrastructure in order for India to effectively compete with countries that are currently leading in these areas.
Providing insights into the Chinese economy, Narasimhan pointed out that for approximately a decade, it had been anticipated that the Chinese economy would decelerate and struggle to sustain the double-digit growth rate it had experienced in previous decades. He remarked that the onset of Covid only expedited this process. Narasimhan highlighted a significant issue facing the Chinese economy today, which is its low domestic consumption. Despite India and China having comparable population sizes, Narasimhan pointed out that India's domestic consumption far exceeds that of China. He added that although the Chinese government was making efforts to boost domestic consumption, it was encountering challenges in achieving this goal.
Narasimhan noted that due to the pandemic, Chinese citizens have shifted towards saving rather than spending. This inclination to save has been further strengthened by the real estate crisis in China, where many individuals lost their savings, leading them to prioritize saving over consumption. Additionally, Narasimhan highlighted a significant issue of high unemployment in China, reaching approximately 20 percent. He advocated for the industry to acknowledge and respond to such emerging trends promptly, suggesting the adoption of a 'just-in-case' strategy alongside the commonly favored 'just-in-time' approach.
Answering another question, Narasimhan said that the world was getting more ‘mini-lateral’ than ‘multi-lateral’, with small groupings of countries – such as the I2U2 (India, Israel, UAE, USA). He said it was good that India did not join the Regional Comprehensive Economic Partnership (RCEP), a China-led grouping, that “didn’t help us”. ‘Mini-literalism' emerged because of the realization that "too many countries are too difficult to handle".
He further remarked that numerous nations sought alternatives to current systems, including the United Nations and the Bretton Woods institutions such as the World Bank and the IMF. This sentiment is reflected in the significant number of countries, around 30, seeking membership in the BRICS bloc.