Take Manufacturing Cue From Vietnam

To achieve ambitious electronics production goals, India will need to apply lessons of global integration, competitive clusters, and regulations from Vietnam

- Vinay Ramesh Ronak Pol

OUR NATION AIMS TO become viksit by 2047, so that the average Indian can enjoy a standard of living equivalent to that of the developed world. As we set about achieving this ambition, it would be helpful to look at a peer which has, in just over 15 years, travelled much further. In 2008, India and Vietnam were at almost the same GDP per capita (approximately $1,000). In 2023, Vietnam, at ~$4,400, was closing in on double our per capita GDP of ~$2,400.

Most of the difference can be explained by Vietnam's manufacturing exports story, especially in electronics. In 2008, its exports were much lower than ours, at ~$65 billion relative to our ~$200 billion. Vietnam's merchandise exports in 2023 were only slightly lower than ours, at ~$355 billion, relative to our $430 billion. To give a sense of relative scale, Vietnam's population is only 10 crore compared to our 140 crore. And while export-led growth is the only successful model demonstrated by any country, with Japan, Taiwan, Korea, China, and India being other notable examples, the Vietnam story is most useful now because the opportunity it represents remains available to us.