China's zero covid policy & India's oppurtunity.

 China's zero covid policy and frequent lockdowns has led to an urgency to Global Value Chain (GVC) restructuring and relocation. Even though this process began over the last decade in a very slow pace, India was not able to attract relocating supply chains. The present policy of China is an oppurtunity for India to attract these relocating GVC's.

The global financial crisis of 2008 and other disasters like earthquakes, tsunami, floods disrupted these supply chains of different sectors. These sectors include automotive, semiconductor, electrical appliances etc. Corporations undertook risk rebalancing strategies, regionalisation of GVC s by near shoring to neighbouring countries as options. These provide flexibility in response to sudden events.

 There were trade tensions between US and China towards end of last decade. EU, Mexico, Taiwan, and Vietnam used this oppurtunity and India coudn't make much use of the oppurtunity.

The present issues regarding pandemic and Ukraine war had created more disruptions in the supply chain of critical components. Easily available substitute options are now considered. Regionalisation and localisation are discussed for GVC restructuring.

India had low levels of GVC integration inthe last two decades. India's trade policy was not designed suitably for integration with GVCs. This could have improved the trade participation as well as manufacturing competitiveness. 

India has recently accelerated its pace of negotiation of FTAs/comprehensive trade agreements.

Integration with Global value chains is an important means to achieve manufacturing competitiveness. India should restructure its trade policy and take advantage of China's zero-covid startegy. This will benefit a lot to the Indian economy if the oppurtunity is used appropriately.