For an intelligent version of self reliance

For an intelligent version of self reliance

Import of colour TVs is now restricted. The aim is to encourage local production. Are we producing the LCD panels, the microelectronics that will control how the individual pixels will light up or not, or the software that will drive the working of the TV? We are not. But we do produce screwdrivers. So, local production of TVs as a result of restricting the import of TVs will mean importing all the high-value parts and sub-assemblies and putting them together in some plant here, putting a ‘made in India’ sticker on what results and then selling it at a hefty premium to the price that would have prevailed, if imports were not restricted. Is this the kind of self-reliance that India wants to promote?

Yes, India should promote advanced manufacturing. That means creating the ecosystem for the building blocks that go into advanced manufacturing. If it is microelectronics that India wants to promote, start with universities that do R&D in that area, industrial clusters that come up around it, supported by reliable power supply, fast connectivity to other parts of the country, trained manpower, including engineers who are paid well to be engineers, instead of engineers who are told early in life that you get paid well only when you stop engineering and morph into a business school-trained manager, uninterrupted flow of technology and materials from wherever in the world they are best produced and competition from around the world to benchmark costs and efficiency. That kind of an ecosystem might well deserve some infant industry protection, not screwdriver technologies.

India began dismantling quantitative restrictions on imports in 1999, as part of its commitment to the World Trade Organisation. Today, India’s economy is maturing to a level where it can reap the benefits of open trade. The US is, however, trying to undermine the WTO. India’s interest lies in promoting rules-based trade, not raising import barriers that set the wrong example for other countries. Quite apart from the absurdity of seeing colour screens as non-essential items in a digitising world.