The United States has been urging India to create an environment that will foster its position in the global supply chain. India continues to face challenges on the market access front. The country is facing these challenges even after improving its ease of doing business.
The COVID-19 pandemic is giving rise to self-sufficiency and self-reliance sentiments among struggling economics. According to Joseph Semsar, Deputy Under Secretary of Commerce for International Trade, India’s ‘AtmaNirbhar Bharat’ initiative has programs that puts question marks on the notion of ‘self-reliance’.
The isolation policies have been decreasing exchange between businesses and economies. There is also a decrease in technology and best practice sharing, fewer joint research. Moreover, there is a decrease in development projects and is chocking innovations.
India’s ease of doing business index has been increasing steadily. However, challenges still remain on the market access front. There are many issues regarding data localization, high tariffs, price controls, and intellectual property rights. Also, there are concerning issues on duplicative safety & security testing and FTI restrictions in insurance sectors.
Despite India’s ease of doing business, the country still ranks 63 out of 190 economies.
According to Semsar, to resolve and overcome the challenges, India and the United States must work together. He also stated that the Trump administration has recognized the need to diversify supply chains. This is applicable to both the economic and national security of the United States (US). The business leaders are finally realizing that they cannot rely on unsuitable sources for their production.
When it comes to supply chains, the industry recognizes three things: diversification, resilience, and reliability. There is a need for diversity in supply chains. Also, the infrastructure needs to be resilient and reliable. But most importantly, the policies in the business environment need to be reliable.