Latest news with #NantooBanerjee
Arabian Post
2 days ago
- Business
- Arabian Post
Indian Trade Unions Need To Reform Themselves To Remain Relevant
By Nantoo Banerjee Trade unionism seems to have lost focus in India. It has failed to reform itself to keep pace with economic reforms and globalisation, and changing job scenarios. It is also facing the biggest leadership crisis. The poor public and industry response to the nationwide strike call by 10 central trade unions on July 9 once again exposed the irrelevance of such an action in a country where the informal sector employs nearly 44 crore workers today, representing 85 percent of the total workforce. The informal sector encompasses a wide range of activities and workers, including those in agriculture, construction, small factories, domestic work, and various other self-employed and micro-enterprise roles. Workers in this sector don't enjoy job or wage protection. As a result, the old-style trade unionism has become irrelevant in the present-day scenario. The so-called central trade unions exist mostly in the public sector where they play some constructive role in the collective bargaining, especially for periodical wage settlement. The shrinking public sector is a matter of concern to them. However, they could do little when the government decided to hand over the control of the country's largest petrochemical company, Indian Petrochemicals Corporation Limited (IPCL), a highly profit-making public sector enterprise, to the Ambani group's Reliance Industries. The central TUs also made no attempt to prevent total privatisation of Bharat Aluminium (BALCO) in favour of Anil Agarwal-promoted Sterlite Industries (now Vedanta Limited). Even before the total privatisation of IPCL and BALCO, the government sold the prestigious Videsh Sanchar Nigam Limited (VSNL) to the Tata group. The company has been renamed as Tata Communications. Where were the leaders of the central TUs, then? Between 2014 and 2024, the government disinvested from as many as 179 central PSEs without any resistance from the trade unions. This explains why workers even from the central PSEs do not trust their trade unions. It could be the key reason behind the near rejection by a vast section of workers of the 'Bharat Bandh' call on July 9 by a forum of 10 central trade unions, including the All India Trade Union Congress (AITUC), Indian National Trade Union Congress (INTUC), Centre of Indian Trade Unions (CITU), Hind Mazdoor Sabha (HMS), Self-Employed Women's Association (SEWA), Labour Progressive Federation (LPF), and United Trade Union Congress (UTUC). Before the failed 'Bandh', the forum had claimed that over 250 million workers from diverse sectors—including banking, insurance, postal services, and coal mining—are expected to participate in the nationwide strike to protest against what the unions described as 'anti-worker, anti-farmer, and anti-national pro-corporate policies' of the Centre. Incidentally, this one was the fifth nationwide general strike (Bharat Bandh) since 2015, including a two-day strike on January 8-9, 2019 and another two-day strike on March 28-29, 2022. All the TU strikes had more or less the same old issues, protesting against the government policies such as PSE privatization, erosion of labour rights, the increasing use of contractual labour, anti-worker, anti-farmer, and anti-national pro-corporate agenda, the government's unwillingness to engage in dialogue with unions, and the proposed amendments to the Trade Union Act, 1926. According to the government, the proposed amendments to the TU Act, 1926, are aimed to modernize and strengthen the framework for trade union registration, recognition, and collective bargaining. Key features include facilitating recognition of trade unions at the central and federal levels, enhancing transparency in the nomination of worker representatives, and potentially reducing industrial unrest. The amendments may also address the number of members required to form a union and the extent of outside leadership. While the TU Act amendment proposals have understandably created tensions among the traditionally-oriented trade unions, the latter are more upset as the government never consulted with the central trade unions for the purpose. The TUs had submitted a 17-point charter of demands to the Union Labour Minister, Dr. Mansukh Mandaviya, last year. According to the unions, the government paid little attention to their demands and never bothered to convene the annual labour conference in the last 10 years, an omission the trade unions interpret as indifference towards the nation's toiling labour force. Unfortunately, today's trade unions lack the leadership of those in the 1970s such as Sripad Dange, B T Ranadive, Satish Loomba, George Fernandes, Mahesh Desai, who forced the then Prime Minister form the country's first Bonus Review Committee leading to the amendment of the Bonus Act to raise the minimum bonus from four percent to 8.33 percent and making the Dearness Allowance (DA) Rules for the government employees and pensioners to offset the impact of inflation. Interestingly, some of the state governments are now challenging the age-old DA Rules saying that the payment of DA should be made purely optional and has to be linked with a state government's capacity to pay. Few will disagree that currently, the trade union movement in India lacks proper leadership and focus, particularly in the face of economic reforms and globalization, and adopting fast to changing labour landscapes to remain relevant to the situation. The public sector concept has been vastly diluted to provide opportunities for the growth of the generally trade union-resistant private sector. The employment in the public sector has been steadily declining since the 1990s. The effective trade union membership in the organised sector has also declined. Trade unions have become overly politicised. Ruling political parties in states have their own affiliated trade unions. Gone are the days when the TUs such as AITUC, CITU, INTUC AND HMS represented the majority voice of workers at both the levels of states and the centre. The central TUs have now become ineffective in most of the states of the country. The increasing pressure on unions to adapt to new forms of work, such as gig work and contractual employment, are posing unique challenges. Most of the unions are still controlled by external leaders lacking understanding of the needs of workers. They have not been innovative enough in developing new strategies to address the challenges of a rapidly changing labour market with employers, including the central and state governments and their agencies, going for contractual employment. Finally, a lack of strong central legislation for union recognition leading to anti-union practices by employers and growing fragmentation among unions are weakening the bargaining power of trade unions. The successive failure of the nationwide strike attempts should serve a wakeup call for the modern-day TU leaders to revitalise their role shifting focus from job preservation to broader issues that concern all workers, including those in the informal sector, and resist fragmentation of unions to present a united front for collective bargaining with employers, including the government. (IPA Service)
Arabian Post
08-07-2025
- Business
- Arabian Post
India Needs To Raise Defence Spending Substantially
By Nantoo Banerjee It is difficult to believe that India, the world's fourth largest economy by gross domestic product (GDP) and a major military power, ranks below even the tiny states of Kuwait and Greece when it comes to defence spending as a percentage of GDP. Considering the tricky geo-political situation in the south Asian region with China, India's No. 1 enemy increasingly surrounding the country with its growing economic and military control over Bangladesh, Sri Lanka, Maldives, Pakistan and Nepal, India does not seem to be spending enough on its defence in the face of a growing China threat. In terms of gross value, India's annual defence budget may not look that unimpressive, but it accounts for less than one-third of China's defence expenditure of nearly $267 billion. The US continues to be the biggest defence spender with a budget of $895 billion. Russia's defence budget is worth around $126 billion. India's defence budget is estimated at only around $75 billion. Effectively, India's defence spending works out 1.9 percent of its GDP. Although China's defence spending is officially estimated at only 1.5 percent of its economy, it excludes several important expenditures such as weapon imports, funding for the People's Armed Police, and research and development, according to the As a result, China's effective defence expenditure may be largely hidden. Or, it could be significantly higher than the publicly shared estimate. Communist China, the third major global military power after the US and Russia, has been rapidly modernizing its technological capability in the defence sector as it is expanding its presence across the world, only next to the US. It is difficult to assess China's actual military expenditure as it is also supposed to provide protection to the country's Belts & Roads Initiative (BRI) investments that cover some 150 countries across the world. The Chinese BRI spans across Asia, Africa, Europe, Latin America, and the Pacific region. Going by the recent reports, China has a potential base in Sri Lanka, Pakistan, Tanzania, Mauritius, Maldives and Myanmar. China is engaged in developing commercial seaports or free trade zones in the Indian Ocean's points of these countries. China is also supporting these countries with finalized contracts for conventional arms sales. The US is concerned. And, so is India. This explains the formation of the Quadrilateral Security Dialogue, or Quad, operating as a strategic forum to promote regional security and cooperation in the Indo-Pacific region, with a focus on shared values and a free and open international order based on the rule of law. The Quad member countries are: the US, Japan, Australia, and India. Interestingly, after the latest meeting of the defence ministers of the 10-member Shanghai Cooperation Organisation (SCO), which includes China, India, Pakistan and Iran, Indian Defence Minister Rajnath Singh refused to sign a draft statement that did not mention the Pahalgam terror attack. As a result, no joint declaration was made. Pakistan's defence spending is around 2.2 percent of its GDP. For the current fiscal year 2025-26, the country's defence budget was initially proposed to be 1.97 percent of GDP. However, following the recent four-day India-Pakistan war, indications are that Pakistan's defence spending, including hidden costs, military pensions and total military-related expenditure, may well exceed four percent of its GDP this year. In recent years, Pakistan's defence spending has generally remained at around 2.5 percent of GDP. Largely import-dependent on China for critical war equipment stocks, Pakistan appears to be ready to fight proxy war for China in both the South and West Asian regions. China's BRI investment in Pakistan, primarily through the China-Pakistan Economic Corridor (CPEC), is estimated to cost $62 billion. The CPEC is a key component of the BRI, aiming to enhance connectivity and trade between the two countries. The 27-member European Union, which appears to be fighting a proxy war in support of Ukraine against Russia, is looking to raise the defence expenditure to as high as five percent of its GDP due to a combination of factors, including Russia's aggression in Ukraine, a reassessment of security risks, the need to modernize its defence capabilities, and to better align with NATO's defence plans. According to reports, Ukraine's prolonged war against Russia is behind the EU's decision in support of a stronger and more unified European defence, particularly in the face of US President Donald Trump's lack of interest in continuously fund-feeding the European partners of NATO. The EU defence expenditure target of five percent of GDP includes investments in broader security areas, such as infrastructure upgrades (roads, railways, bridges), cyber defence, and military mobility to facilitate quick reinforcement. Among the world's top military spenders as percentage of GDP are: Ukraine (34.5 percent), Lebanon (10.5 percent), Israel (8.8 percent), Russia and Saudi Arabia (7.1 percent each), Kuwait (4.8 percent), Poland (4.2 percent) and the US (3.4 percent). India's proposed defence spending as a percentage of GDP in the 2025-26 budget, estimated to be 1.9 percent, represents a substantial decrease from its historical levels of around three percent, excluding large defence pensions, in the early 2000s. While the overall budget allocation for defence has increased in recent years, the percentage of GDP allocated for the purpose has remained at a relatively lower level below two percent. This is despite the changing security environment in the region in the last two decades. Recently, even Bangladesh had the guts to threaten India with possible military action to cut off the 'chicken's neck' in the Dooars region to sever India's land link with its eight north eastern states, namely Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, and Tripura. India should not take the first ever Bangladeshi threat of this nature lightly since the country's import-dependent military is substantially controlled by China. This more than explains why India needs to increase its effective defence spending as a percentage of GDP in the coming years to remain fighting fit to protect the country's territorial integrity and economic progress in the face of a Chinese proxy war using both Pakistan and Bangladesh against India. (IPA Service)
Arabian Post
01-07-2025
- Politics
- Arabian Post
India Must Step Up Attack Drones Production For Its Defence
By Nantoo Banerjee The techniques of traditional warfare seem to be fast changing. Attack drones are increasingly playing a significant role in military aggression alongside missiles. The 12-day Israel-Iran war and the ongoing Russia-Ukraine battle showed how devastating the role of drones in modern wars is. In one of the most daring attacks, Ukraine said its armed forces used 117 attack drones to target airfields deep inside Russian territory. Ukraine's 'Operation Spider's Web' run by its officials said the assault required Ukraine to secretly smuggle the drones into Russia over several months. Now, Russia has stepped up its drone production in a big way. Russian government records show that the country's drone production jumped by 16.9 percent in May compared to the previous month. In April, President Vladimir Putin said over 1.5 million drones of various types were produced last year. Moscow is also developing a new laser-based system to defend against drone attacks. In the Israel-Iran war, Iran launched around 1,000 drones at Israel during the war, according to the Israel Defence Forces (IDF). Those Iranian drones seemed to have done bigger damage to Israel than the missiles. Iran launched some 550 ballistic missiles at Israel during the war. Most of them were intercepted by Israeli and American air defences at an interception rate of around 90 percent. Iran deployed more than 1,050 drones. Of them, 570 had reportedly reached Israeli territory. Almost all of the world's top military powers, including the United States, Russia, China, Israel, South Korea, the United Kingdom and France, are using their advanced military technology to manufacture more and more attack drones. Surprisingly, India, considered to be the fourth largest military power, is vastly lagging in production of attack drones. India's import-happy defence industry seems to have strongly neglected the area of drone manufacturing. According to 'Warpower: India' reports, the total number of attack drones with the country is less than five. Although the precise number is not publicly available, it is estimated that the country's three military services — Indian Army, Navy, and Air Force — collectively operate a fleet of some 179 drones for ISR (Intelligence, Surveillance, and Reconnaissance) and attack purposes. This includes platforms like the Searcher series, Heron. Various indigenous drones are under development such as TAPAS-BH-201 (Rustom-2). The fleet of reconnaissance and services drones comprises 87 drones. India's indigenously developed drone technology mostly attaches importance to drones for reconnaissance and surveillance (ISR/Recon). The country is yet to attach much importance to indigenous manufacturing and acquisition of attack drones. Lately, India has been designing and developing a Medium Altitude Long Endurance (MALE) drone, the TAPAS-BH-201 (Rustom-2), which is a MALE drone for ISR missions. India, the world's second largest arms importer after Ukraine, seems to prefer imported military-purpose attack drones to domestic manufacturing. It is said to be in the process of acquiring 31 MQ-9B Sea Guardian drones, with 10 each for the three services and one spare. According to Analytics India Magazine, India's military drone market is projected to grow significantly. The market value is expected to reach $4.082 billion by 2030. It is difficult to understand why the need for indigenous attack drone manufacturing failed to attract the attention of the country's defence ministry and the government while the major military powers across the world are increasingly emphasising on the development and production of attack drones. Interestingly, during the last four-day India-Pakistan war, Pakistan had reportedly used as many as 400 drones, acquired mostly from Turkiye. Pakistan is believed to be in possession of a big fleet of drones, with varying roles and capabilities. They include Medium Altitude Long Endurance (MALE) drones, tactical drones for the army and air force, and smaller mini-UAVs. Pakistan has around 60 MALE UAVs. Its Navy operates an equal number of UAVs. The Pakistani Army has roughly 100 tactical UAVs, while its Air Force has around 70. According to reports, Pakistan deployed 300-400 drones in coordinated attacks against India. One report mentioned the use of '300 to 400 SAR drones,' possibly referring to Turkish-made drones. Another suggests Pakistan may have used 800 to 1000 drones, mostly non-attack drones. Overall, Pakistan's drone capability is strong. It is being aided by both Turkiye and China. Paradoxically, while India is upset with the Turkish military aid to Pakistan and is against trade and economic cooperation with Turkey, it has remained silent on China, which accounts for over 70 percent of Pakistan's defence imports including drones. Pakistan's drone force consists of both foreign and local solutions. Primary contributions are made by Pakistani defence players as well as its close strategic ally China. It has a quantitative stock of Chinese Wing Loong II attack drones which are fielded alongside the Turkish Anka type. The rest is achieved with general reconnaissance and recon-attack models. China is the world's second largest manufacturer of attack drones (UCAVs) after the United States. Other major attack drone manufacturers include Israel, Iran and Turkiye. The US has a large and advanced drone fleet, with manufacturers like General Atomics, Lockheed Martin, and Northrop Grumman producing prominent models such as the MQ-9 Reaper. China has a number of companies manufacturing military drones. Top Chinese attack drone makers include CASC and CAIG offering a range of UCAVs for both domestic use and export. Turkiye has significantly expanded its drone capabilities in recent years, with Baykar Technologies producing the Bayraktar TB2, a widely deployed attack drone. Israel's Elbit Systems and Rafael Advanced Defence Systems are known for developing and exporting various types of UAVs, including both surveillance and attack models. Iran's growing presence in the global drone market, with companies like IAIO, is worth noting. Several Indian companies are currently involved in the design, development, and manufacturing of drones for military applications. They include Hindustan Aeronautics (HAL), IdeaForge Technology, Zen Technologies, Paras Defence and Space Technologies, and Adani Defence & Aerospace. Additionally, companies like Larsen & Toubro (L&T) and Throttle Aerospace Systems are also contributing to the sector. It is high time that India's armed forces encourage the domestic defence manufacturers to design and produce high quality combat drones. The government must allocate adequate funds to the three services to acquire attack drones, especially from domestic manufacturers. The HAL manufactures various types of drones, including the ABHYAS high-speed expendable aerial target. The public sector defence firm is also involved in the development of larger, more advanced unmanned combat aerial vehicles (UCAVs). Adani Defence & Aerospace has a collaboration with Elbit Systems, Israel's largest arms manufacturer, to produce the Skystriker loitering munition drone. It also produces the Drishti (Hermes 900) surveillance drones. L&T makes various drone-related projects for the Indian armed forces, including surveillance and logistics operations. What India badly needs are attack drones. The country is moderately equipped to manufacture and export high-quality missiles, but severely lacks capability in making high precision attack drones to be fully war-fit. (IPA Service)
Arabian Post
24-06-2025
- Politics
- Arabian Post
The Western Nations Are Concerned About A Shia Nuke
By Nantoo Banerjee It may be wrong to believe that Israel and the United States of America are the only two countries strongly against Iran's bid to become a nuclear-armed country. The entire world is concerned about nuclear proliferation and nuclear smuggling and its falling into the wrong hands. The nature of the Iranian regime has added to the concern. It is probably the only major country in the world run directly under a spiritual leader. This may be the cause of worries for many. The Vatican City state of Rome, a Papal Kingdom, retains only a small ceremonial unit of the Swiss Guard as its defence force, which also serves as the Pope's personal body guard. The Pope generally preaches love, compassion and world peace. Iran is ruled by the supreme Shia spiritual cleric, Ayatollah Ali Khamenei, championing the cause of Shia supremacy. Shiite Iran is believed to be aspiring to build a nuclear arsenal ever since Sunni Islamic faction led Pakistan became a nuclear-armed state. Iran is an Islamic republic with a strong theocratic system and a great influencer of Shiite states and Shiites across the world. In contrast, the present Grand Imam of Al-Azhar, Ahmed el-Tayeb, considered to be the highest authority in Sunni Islamic thought and jurisprudence, is not known to be a political person. Although only three countries across the Muslim world, comprising 57 states (members of the Organization of Islamic Cooperation), have a majority Shia population, the community has significant presence in several other Muslim countries mostly led by the rival Sunni faction. The Shia-Sunni rivalry makes Iran's ambition to emerge as a nuclear-armed state a major geopolitical concern, especially in West and Central Asia as also in South and South-East Asia and European countries with a good Muslim population. The three Shia majority countries are: Iran, Iraq and Azerbaijan. Significant Shia communities also live in Bahrain, Lebanon, Kuwait, Turkey, Yemen, Saudi Arabia, Afghanistan and the Indian subcontinent. Sunni community-led Pakistan's nuclear arsenal has always been a major concern of western democracies as well as India. The late Abdul Qadeer Khan, the 'father of Pakistan's nuclear bomb,' was known for his involvement in smuggling of nuclear technology. He had officially admitted that he was running a nuclear proliferation network. He was initially placed under house arrest in 2004 after admitting to selling nuclear technology to Iran, Libya, and North Korea. A Q Khan was subsequently released in 2009. Most of the existing nuclear states fear that Iran might share nuclear weapons and technology with other countries or non-state actors, including terrorist groups, leading to wider proliferation. The nature of Iran's government headed by the supreme Shia spiritual leader and its ambition to emerge as a major nuclear power are what the non-Islamic world are mostly concerned about. The tiny Jewish state of Israel is highly worried as 'annihilation' of Israel is said to be the primary agenda of the supreme Iranian clergy. The western world is concerned as Iran's devastating weapons such as long-range missiles and drones are in the hands of a spiritual cleric. Iran is believed to have the largest and most diverse ballistic missile stockpile in West Asia. Iran is displaying its military strike capabilities as the country's spiritual head and supreme leader vowed to open 'the gates of hell'. Through the best part of last week, waves of Iranian missile and drone barrages had been lighting up the skies across the tiny Jewish state of Israel which is only 1.33 percent geographical size of Iran. Israel's total population is around 9.8 million as against Iran's 87 million. Under Iran's supreme spiritual leader, the country has been developing sophisticated long-range missiles for decades. From the very beginning, the oil-rich 'spiritual fiefdom' wanted to be a strong military power and be seen as the biggest strength of the global Shia community, constituting nearly 15 percent of the global Muslim population of 2.047 billion as estimated by Islam is the world's second-largest religion in terms of adherents. The Muslim population has been growing faster than the overall world population, with a 21 percent increase in the number of Muslims between 2010 and 2020, compared to a 10 percent increase for the rest of the world. Today, Iran possesses a very large number of short-range rockets and potential hypersonic weapons, most of which are locally produced with the blessings of the Ayatollah. Estimates from the US Office of the Director of National Intelligence suggest that Iran possesses around 3,000 ballistic missiles, a figure that surpasses any other regional power, according to the Australian Broadcasting Corporation. They include missiles of various ranges and types, contributing to Iran's significant military might in the region. Iran has also emerged as a major manufacturer-exporter of highly sophisticated drones. Last year, the Ukraine government claimed that Russia launched over 8,000 Iran-developed drones during the war. Iran is recognized for its advancements in drone technology, particularly in areas like combat drones and loitering munitions (suicide drones). Iran has been exporting drone technology to various countries, including Sudan, Syria, and Ukraine, and has supplied drones to regional allies and militias. To the credit of the country's spiritual leadership, Iran has developed a massive drone industry. It has been relying on indigenous production helped by international sanctions. Iran's drone industry has focused on local engineering and manufacturing. It has been producing drones like the Ababil, Mohajer, and Shahed series, including the Shahed-136 (also known as Geran-2 in Russia) and the newer Shahed 238. Iran's Kaman-22 drone resembles the US MQ-9 Reaper. Iranian drones are reshaping the dynamics of conflicts, particularly in West Asia and in the Russia-Ukraine war context. With Pakistan boasting the Sunni nuke, Iran's development of Shia nuke arsenal could be only a matter of time. The US-led western world and the Jewish state of Israel are most unlikely to be able to halt the process. In a normal situation, the western world and even Israel, the world's eighth largest nuclear power, would not have been so hyper about Iran's nuclear ambition if its purpose were purely in self-defence. However, under the supreme spiritual leader Ayatollah, Iran is often seen as a 'rogue state' by many Western countries, particularly the US, largely due to Iran's challenging of the US-led world order and its support for groups that oppose American interests in the West Asian region. Iran is known to actively support groups like Hezbollah and Hamas, which are considered terrorist organizations by the US and its allies. Oil-rich Iran turning to be a major nuclear armed state is seen as a major threat to the existing balance of power. The control of the state machinery in the hands of a supreme spiritual leader adds to the cause of worry. (IPA Service)
Arabian Post
10-06-2025
- Business
- Arabian Post
India's Industrial Output Sinks Even As GDP Grows
By Nantoo Banerjee India's economic growth figures seem to be getting increasingly delinked with domestic manufacturing, industrial output, and job generation. The manufacturing sector had a very little contribution to the country's 6.5 percent GDP growth during the last financial year, the slowest in four years. Despite a good monsoon last year, the country's agriculture sector growth rate in the second quarter (October-March) was 3.5 percent. The industrial growth rate for 2024-25 is estimated to be only four percent, also marking the lowest in the last four years. In April, the country's industrial output slowed to an eight-month low at 2.7 percent as per the data released by the National Statistical Office (NSO). What is pushing the country's GDP growth? Obviously, the less reliable estimates of the country's vast services sector backed substantially by imports. Ironically, India's total imports in the last fiscal had grown by 6.85 percent, a little above the country's GDP growth rate. This may give a somewhat wrong impression that the GDP growth is linked with the import growth. Uncontrolled imports, mainly from China, are dampening India's domestic production initiative and new job generation agenda. China's imports from India are rapidly shrinking. In the last fiscal, India's imports from China grossed over $113 billion, a $11.5 percent rise over the previous fiscal. The top imported products from China included electrical and electronic equipment, machinery, organic chemicals, and plastics, most of which should have been manufactured in India. This increase contributed to a widening trade deficit for India. In contrast, India's merchandise exports to China collapsed to only $14.25 billion from $16.66 billion, last year. Export-led China does not seem to like to import anything from India. No one in the government appears to be concerned about the country's massive import growth year after year, especially from China. Imports are mostly at the cost of domestic production and local jobs. A country does not import merchandise alone. It also imports labour that goes into the manufacturing of imported products. China continued to be India's top import source, by far the biggest from any single country. In the last fiscal, India's total imports are estimated to have grown to US$ 915.19 billion. This growth was driven by higher merchandise imports, which reached US$ 720.24 billion, a significant increase compared to the US$ 678.21 billion in the previous fiscal. No department in the government is willing to take the responsibility of the low and slow domestic industrial production and sinking job growth rates since the present BJP-led national government has been in operation. The government has been acting more like a dream merchant often seen busy in forecasting and focussing on India's long-term economic prospects. The so-called 'Make-in-India' initiative made little success in the absence of the import-happy government's liberal investment policy, especially in manufacturing, that could strongly induce foreign industrial investors rush to India as they did in Communist China for several years. Foreign investors are not interested in the political colour of a government. In the first three months of 2025, the foreign direct investment (FDI) in China was as much as US$36.9 billion. Consider this against the FDI inflow of a mere $0.4 billion into India during the whole of 2024-25. It was $10.1 billion, a year ago. This is probably the worst performance in the country's annual FDI inflow records while the government keeps talking about India emerging as a global manufacturing hub. India's own industrial entrepreneurs are investing little in the country. Instead, they are indulging in investing abroad. During the last financial year, India's net outward FDI (OFDI) grew 75 percent year on year to $29.2 billion. Singapore, the US, UAE, Mauritius and the Netherlands together accounted for more than half of the rise in OFDI. The country's Index of Industrial Production (IIP) expanded by only four percent for the 2024-25 fiscal. This growth is lower than the 5.5 percent recorded in March 2024. The manufacturing sector experienced a further slowdown, with growth at 4.5 percent for the year, down from 12.3 percent in 2023-24. The IIP grew by only three percent in March 2025. The industrial output grew by four percent during the April-October period of the last financial year. The share of manufacturing in India's GDP continues to be as low as 12 percent. According to Visual Capitalist, the share of manufacturing in China's GDP is projected to be around 29 percent of global manufacturing output in 2025. This amplifies the significant dominance of China in global manufacturing, potentially matching or exceeding the combined share of the US and its allies. Specifically, China is projected to have a manufacturing output of $4.8 trillion, accounting for 29 percent of the global value. Less than two months ago, India's Finance Minister Nirmala Sitharaman said the country plans to raise the share of its manufacturing sector from 12 percent to 23 percent over the next two decades, aiming to create jobs and drive economic growth. While speaking at the Hoover Institution at California's Stanford University, the finance minister said India is focussing on 14 identified sunrise sectors like semiconductors, renewable energy components, medical devices, batteries and labour-intensive industries, including leather and textile, to enhance the share of manufacturing in GDP. However, of these industries, semiconductors may only appear to be a sunrise industry in India. Incidentally, the present form of the global semiconductor industry is almost 70-year-old. The first commercially available microprocessor, Intel 4004, was released in 1971. India is expected to launch its first locally produced semiconductor chip, under foreign equity and technical control, by the end of the current year. India is a major importer of semiconductors. Its local end-use market is projected to double from $54 billion in 2025 to $108 billion by 2030. Lately, the government's highly liberal investment incentives are expected to bring foreign companies to help push up domestic semiconductors production. Until recently, the government appeared to be rather casual about strengthening the country's industrial and manufacturing bases. Even in 2014-15, when the Narendra Modi-led government came to power at the centre (May 26, 2014), India's manufacturing sector contributed 16.3 percent to the country's GDP. While the government's much-touted 'Make-in-India' policy was launched in September 2014, hoping to fast-forward its share, the manufacturing sector's contribution to GDP has subsequently declined mainly due to the lack of a strong commitment to the programme and uncontrolled import growth over the years. That may explain why the country's annual GDP growth rate has generally failed to reflect on its growth of the manufacturing sector and employment. (IPA Service)
