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In a fracturing global economy where global supply chains face extensive disruptions, trusted geographies will matter more than cheap geographies, and India must position itself as a trusted partner to nations worldwide, former G20 Sherpa Amitabh Kant stated on Monday.
Addressing the Platinum Jubilee of the All India Management Association (AIMA), Kant outlined the structural shifts transforming international trade, pointing out that global value chains constructed strictly for efficiency are now being re-engineered for resilience. "Fractured global order, supply chain realignment, technological disruptions and climate transition- all these are going to be key challenges. But these are going to be the key challenges which every country is going to face," Kant said. "These will also create the strategic space for rising powers. And India is a rising power." "For us, trusted geographies will matter more than cheap geographies, and therefore we need to become a trusted partner of many countries in the world," he added. He noted that the post-World War II period of geopolitical stability has drawn to a close, replaced by rising protectionism, muscular industrial policies, and regional conflicts that affect emerging markets. Kant noted that to transition from an estimated USD 4 trillion economy to a USD 30-plus trillion economy by 2047, India needs its gross domestic product to expand nine times and its manufacturing sector to grow 16 times. Achieving this expansion, he explained, requires shifting focus from the ease of doing business to directly tackling the cost of doing business, specifically across finance, electricity, land, and logistics. "We focused on ease of doing business, but I think now is the time to focus on the cost of doing business. And when I say the cost of doing business, the cost of finance is critical," Kant said. "In China you get finance at 3%4%. In Vietnam you get between 5.6% to 6%. In India it's from 8.9% to 20%." He noted that the country's credit-to-GDP ratio stands at 50 per cent compared to over 200 per cent in the United States and China, stressing the need to bring down the statutory liquidity ratio from 18 per cent to 10 per cent to unlock credit flows for manufacturers and micro, small, and medium enterprises. He also called for providing industrial land on 99-year leases and rationalising industrial electricity tariffs, which currently stand at nearly three times the domestic consumer rates. Highlighting energy independence as an economic imperative, Kant said India imports 88 per cent of its fossil fuel requirements and 50 per cent of its natural gas. He warned against replacing hydrocarbon import dependencies with battery import dependencies, urging the country to scale clean energy ambitions beyond existing targets to 1,500 gigawatts by 2030 to supply power to emerging sectors such as data centers. (ANI)
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