New Delhi is continuously sending across a loud and clear message to Beijing- India will not stop punishing China amidst the ongoing confrontation between the two Asian giants. Over the past few months, India has targeted China’s tech, telecom, ship-building and oil sectors, and now the Modi government is looking to kick China out from the Pharmaceuticals and other chemicals sector.
According to TOI, sources have said that the Modi government is planning a production linked incentive scheme worth Rs. 25,000 crores (approximately 3.4 billion US dollars) with the object of bolstering the local manufacturing of certain key chemicals used in pharmaceuticals, insecticides and other crucial industrial segments.
This seems like a big plan to oust China from India’s chemicals sector. According to the TOI report, the Department of Chemicals has identified around 75 critical chemicals and some additions are also going to take place. The proposed initiative includes offering ten per cent of the production value as incentive. The idea seems to be to entirely localise the production of the critical chemicals.
The latest development comes as a significant setback for China, given that India imports chemicals worth Rs 1.5 lakh crore (or 20.5 billion US dollars) every year. Eighty to ninety percent of these imports come from China, and therefore by localising manufacturing of key chemicals, India is shutting its doors on the Dragon.
A senior official said, “Chemicals are essential products used in many industries including medicines. While we have already started a PLI scheme for manufacturing pharma APIs, we realised that there are some key chemicals – which are still being imported from China – for use in manufacturing these APIs. Hence, the need for complete backward integration to ensure we are not dependent on imports.”
India is making two significant steps here- one, it is definitely taking continuing with the momentum of the punitive measures that New Delhi has been imposing on China amidst the rising military tensions. And secondly, India is empowering its own pharmaceuticals sector.
By localising the chemicals industry, India is ensuring that it doesn’t have to remain dependent on China for procuring active pharmaceutical ingredients (APIs)– a key raw material in the Pharma sector any longer. The move is as much a part of Prime Minister Modi’s atmanirbhar (self-reliance) campaign, as it is a part of his crusade to punish China.
Modi government knows that the Chinese economy is already passing through a painful phase, with Japan and the US decoupling from the Dragon. Moreover, Beijing isn’t really finding any respite from the Brussels-based European Union either. India, therefore, finds a perfect opportunity to pile on China’s misery through apps ban and other restrictions directed at the Chinese economy.
In this process, India is increasing the costs of China’s Eastern Ladakh misadventure along the Line of Actual Control (LAC). India will keep punishing China until the military standoff in Ladakh gets resolved and by the time the standoff does end, Beijing would have lost out to India heavily in the ongoing economic warfare.