China manufacturing slip gives India opportunity to grab share in global market, says Uday Kotak

The slip in China's manufacturing output, which was a result of the COVID-19-induced restrictions in the country, gives a chance to economies like India to grab their share in the global manufacturing market, said veteran banker Uday Kotak, while speaking in Global Economic Policy Summit in New Delhi on December 12.

"There is an opportunity for us as some other country (China) which dominated the world's manufacturing is not doing a great job," said Kotak, who is the managing director of the Kotak Mahindra Bank.

"There was a time when many in India felt that we have missed the bus on manufacturing, and should focus on services...The issues which China currently faces brings back the opportunity for India to get a reasonable share in global manufacturing capability."

Kotak, who is also the former chief of the Confederation of Indian Industries (CII), said the Indian government and businesses should "go all out to woo the manufacturers".

India needs to "focus on ease of doing business", he said, adding that changes could be required in "our mindset, laws and practices" to make the most of this "unique opportunity" to increase the share in global manufacturing.

Manufacturing comprises 16 percent of the country's gross domestic product, Kotak pointed out, adding that "we should be 20 percent and above".

Notably, China's factory activity has shrunk consecutively for two months. The Purchasing Managers' Index - a key metric to gauge the level of production - dropped to 49.2 in October, followed by a further slide to 48.0 in November, as per the official figures released by Beijing.

The plunge in manufacturing has adversely affected China's exports, which decreased to 8.7 percent in November, marking the sharpest drop since February 2020.

According to Kotak, "one of the biggest pressure points", from the global economy perspective, will be Europe in the period to come.

The continent has been affected by the war between Ukraine and Russia, and a number of countries dealt with the resultant energy crisis.

The United States, on the other hand, is "self-sufficient" and can survive the adverse economic fallout from the war, Kotak said. "But the same can't be said about Europe," he added.

"Geopolitics is a key factor in economics than ever before," Kotak noted, further stating that he "genuinely believes that India has a much greater ability to play a bigger role".