India is vying with Vietnam to attract global manufacturers

New Dethi should reconsider tariffs in support of 'Make in India’

- TIM CULPAN

India wants to build a robust computer and electronics manufacturing industry, it needs to shift focus, fast. Instead of concentrating on its domestic market, it should become regionally competitive and export-driven. That would mean recognizing that Vietnam, not China, is its biggest rival.

The latest reminder of this urgency came last week with a US appeal for New Delhi to make the business environment easier and more transparent to navigate, or keep losing out on foreign direct investment. Cutting import duties ought to be high on the list, US Ambassador to India Eric Garcetti told the Indo-American Chamber of Commerce on 30 January. If you tax inputs, you are taxing your outputs, Garcetti noted. "You are not taxing us, you are not protecting the market. What you are doing is limiting a market." A day later, the Indian government reduced tariffs on a range of imported components including battery covers, lenses, antennae and mechanical parts to 10% from 15%. The timing might look like New Delhi was following that advice, but it's more likely a coincidence and even possible that Washington knew it was coming.