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THE PROBLEM WITH INDIA’S BLOCKING OF THE CHINESE

Syllabus:

GS 3:

• Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.
• Changes in Industrial Policy and their Effects on Industrial Growth.

Why in the News?

India’s blocking of visas for Chinese technicians is a significant issue due to its impact on industries dependent on Chinese expertise. With Indian businesses struggling to utilize imported machinery effectively, the visa restrictions highlight broader challenges in addressing India’s skill deficit and ensuring economic growth.

Source: IE

Introduction and Context:

• Visa Promises: Indian authorities have pledged to issue more visas to Chinese technicians, whose expertise is urgently needed by Indian businesses to enhance productivity and efficiency.
• Skill Gap: Rajesh Kumar Singh, Secretary of the Department for Promotion of Industry and Internal Trade, acknowledged the significant skill gap between Chinese and Indian factory supervisors and workers, highlighting the need for skilled foreign labor.
• Productivity Benefits: Indian businesses, particularly in sectors like footwear and textiles, have emphasized that Chinese professionals can significantly boost productivity, producing 150 items with the same resources that Indian workers use to produce 100.
• Industry Calls: Leaders from various Indian industry associations, including the Engineering Export Promotion Council of India, have been advocating for more visas for Chinese technicians to ensure machinery purchased from China is utilized effectively.
• Idle Machinery: Many Indian businesses have purchased advanced machinery from China, but without the necessary technical expertise from Chinese technicians, these machines remain underutilized, affecting production and export orders.
• Adani Example: Gautam Adani’s solar manufacturing facility is one among many awaiting visas for Chinese workers, underscoring the widespread dependence on foreign technical assistance in various industries.

Addressing the Skill Deficit

• Official Acknowledgement: The government’s recognition of India’s substantial skill deficit is crucial, as it underscores the necessity of foreign expertise even in labor-intensive, “low-tech” production.
• China’s Expertise: China has developed a deep well of manufacturing expertise over the past 40 years, becoming a global manufacturing hub with experts who are cost-effective compared to those from other countries.
• National Security Concerns: Despite the need for Chinese expertise, the Indian government restricts their entry, citing national security concerns, which hampers India’s ability to climb the global skills ladder.
• Visa Restrictions: The slow progress in fulfilling the promise of more visas for Chinese technicians is a significant barrier, driven by a security-focused mindset that limits foreign technical assistance.
• Atmanirbhar Bharat: The government’s rhetoric of self-reliance under the “Atmanirbhar Bharat” initiative contrasts sharply with the reality of India’s growing dependence on foreign expertise to drive economic growth.
• Education Gap: The pressing need for foreign technical assistance highlights the broader issue of inadequate domestic education, which remains a fundamental obstacle to India’s development.

Discouraging Visa Prospects

• Decline in Visas: Chinese nationals received 200,000 visas in 2019, but this number plummeted following the 2020 clashes between Indian and Chinese troops, with allegations of visa violations and money laundering.
• Current Visa Status: In 2023, the number of visas issued to Chinese personnel dropped to a mere 2,000, with stringent screening processes further delaying the issuance of even the limited visas for Chinese electronics professionals.
• Ministerial Stance: Despite positive statements from Commerce and Industry Ministry officials, a cabinet minister has tempered expectations, stating that visas will be issued only after thorough screening to ensure compliance with travel conditions.
• Security-Driven Mindset: The national security argument is powerful and often cloaked in the rhetoric of self-reliance, overshadowing the critical need for foreign expertise to drive economic growth.
• Impact on Growth: The irony of invoking self-reliance while relying on foreign expertise for economic growth underscores the disconnect between government policy and the practical needs of the industry.
• Visa Screening: Intensive visa screening processes threaten to undermine initiatives aimed at boosting productivity and economic growth through foreign technical assistance.

Integrating Foreign Knowledge

• Historical Lessons: East Asian economic history demonstrates that foreign knowledge spurs development only when combined with a well-educated domestic workforce, a lesson India must heed.
• Korean Example: In the 1980s, Korean businesses imported foreign machines for reverse engineering, relying on a solid educational foundation built over three decades, needing minimal foreign human assistance.
• Chinese Model: China’s rapid development since the early 1980s was underpinned by strong primary education from the Communist era, enabling it to leverage foreign expertise effectively.
• Deng Xiaoping’s Vision: Deng Xiaoping’s policies of sending policymakers on international study tours and attracting foreign investors to bring global knowledge to China played a crucial role in its development.
• India’s Education Challenges: In contrast, India’s educational initiatives have largely failed to equip students with the necessary skills, as highlighted by surveys of learning outcomes and international assessments like PISA.
• Urgent Reforms Needed: India must prioritize substantial improvements in its education system to create a workforce capable of integrating and benefiting from foreign knowledge and expertise.

The Red Queen Race

• China’s Advancements: China continues to advance rapidly in education and technology, with its students outperforming globally in assessments like PISA, and its universities excelling in fields critical to industrial progress.
• Technological Frontiers: Chinese scientists are making significant strides in applied sciences, and the country leads in sectors like electric vehicles and solar technology, moving towards dominance in artificial intelligence.
• Global Competition: Western countries, facing competition from China, are erecting trade barriers instead of addressing fundamental weaknesses in their education systems, a lesson India must learn from.
• Misguided Optimism: Indian and international elites often fail to grasp the importance of foundational education for economic growth, leading to misguided optimism about India’s potential as a global economic superpower.
• Job Market Realities: The COVID-19 pandemic exposed the fragility of India’s technology-related service exports, with even graduates from prestigious institutions struggling to find employment.
• Labour Market Stagnation: India’s labor-intensive manufactured exports remain stagnant, and the country risks missing out on opportunities due to protectionist policies and a dysfunctional education system.

Reality Check for India

• Visa and Security Concerns: Blocking visas for Chinese experts under the guise of national security and self-reliance could stifle opportunities for economic growth and technological advancement.
• Human Capital Deficit: Addressing the severe deficiencies in India’s education system is critical for building a capable workforce that can compete globally and drive sustainable economic growth.
• Missed Opportunities: India has already missed the China-plus-one opportunity, with countries like Mexico and Vietnam capitalizing on shifts in global supply chains due to their strategic locations and superior human capital.
• Economic Prospects: Without substantial reforms in education and an open approach to foreign expertise, India risks falling further behind in the global economic race, leaving millions without dignified employment.
• Global Red Queen Race: The intensifying global competition necessitates urgent action to improve education and integrate foreign knowledge, ensuring India can secure a place in the rapidly evolving global economy.

Key Challenges

1. Skill Gap: There is a significant skill gap between Chinese and Indian factory supervisors and workers, hindering productivity and efficiency in various industries.
2. Visa Restrictions: National security concerns have led to stringent visa restrictions for Chinese technicians, delaying essential technical assistance and impacting production.
3. Underutilized Machinery: Advanced machinery purchased from China remains underutilized due to the lack of skilled technicians to operate and maintain them effectively.
4. Educational Deficits: India’s educational system has failed to equip students with the necessary skills, resulting in a workforce ill-prepared for modern industrial demands.
5. Economic Irony: The rhetoric of self-reliance conflicts with the reality of India’s growing dependence on foreign expertise, particularly from China, to drive economic growth.
6. Global Competition: India’s inability to effectively integrate foreign knowledge and expertise leaves it lagging behind competitors like China, Vietnam, and Mexico.
7. Protectionist Policies: Nationalistic policies and a security-driven mindset hinder India’s ability to attract and utilize foreign expertise, further stalling economic progress.

Way Forward

1. Increase Visas: Expedite the issuance of visas for Chinese technicians to address immediate skill gaps and enhance productivity across various sectors.
2. Educational Reform: Implement comprehensive educational reforms to improve the quality of primary and secondary education, ensuring students acquire essential skills.
3. Skill Development: Invest in vocational training and skill development programs to bridge the gap between educational outcomes and industrial requirements.
4. Leverage Expertise: Develop policies that encourage the integration of foreign technical expertise with domestic capabilities to foster industrial growth.
5. Collaboration: Foster closer collaboration between industry and educational institutions to align curricula with the skills demanded by the job market.
6. Technological Advancements: Embrace and invest in technology transfer and knowledge-sharing initiatives to stay competitive in the global market.
7. Policy Adjustment: Reevaluate and adjust protectionist and security-driven policies to create a more conducive environment for foreign investment and expertise, driving long-term economic growth.

Conclusion

India must address its educational shortcomings and embrace foreign expertise to enhance productivity and compete globally. Failing to do so will hinder economic growth, leaving millions without dignified employment. A balanced approach to national security and economic needs is essential for sustainable development and global competitiveness.

Mains Practice Question

Discuss the implications of India’s restrictive visa policy for Chinese technicians on its industrial growth and economic development. How can India balance national security concerns with the need for foreign expertise? Propose measures to address the skill gap in the Indian workforce.

Source :The Hindu

Associated Article:

https://universalinstitutions.com/india-china-partnership/