Nilgiri
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- Aug 4, 2015
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Yes there must be some regulation....but done in concert with where India's skill training and MUDRA financing is mostly directed....they must be given protection from dumping in such areas till they are themselves able to withstand by themselves.
But we cannot over-regulate every single thing....especially if they are inputs for much value added production chains. Lets say we import some item from China....if the potential employment generated by putting tariff/quota on it (or banning it altogether in some way) is much less than the employment that it is already supporting + employment it will generate (at the price level being sold)....then there is no reason to regulate this as much as say something like steel.....at least until we get our skilled employment way above the level it is now (so there is actual good steady supply of skilled labour to manufacturers at low cost so they can then price appropriately).
Most Chinese goods cannot really resort to walmart tactics either (outprice and kill every local supplier and then ramp up price)...because of the relatively low elasticities of the production of such consumer goods....they generally do not need tons of capex, but just conducive labour policies and large labour pool. Those are things that India specifically can address relatively easily (its policy for the most part)....and then undercut at the appropriate time. Only huge capex industries must be protected as much as possible from dumping (steel, auto etc.)
Basically there must be a top down review of where the comparative advantages are and focus on exploiting that...rather than trying to better every single absolute advantage....which is a slippery slope to protectionism and inefficiency.
