'China's net exports = 26% of India’s GDP': Finfluencer lays bare stark economic truth

[Nilgiri]

The bigger issue at hand is that they can and are exporting MASSIVE amount of commodities and specialised goods. To the point they are undercutting even after any tariff. And they due to surpassed domestic demand, they can pump out even more. Not to mention their carefully managed currency, which should be 10x higher if it were free floating, makes it impossible to replace them on cost alone.

The even bigger point is that now India's trade deficit vis a vis China is so massive that it is a strategic vulnerability. If China turns off the tap of cheap imports, a lot of Indian businesses will fold and it will trigger a massive recession in India while having almost NO impact on China because India forms an insignificant part of Chinese trade.

So yes, it is a very real and very present vulnerability that no amount of argument can fix. The only way around is to manufacture, manufacture and then some more manufacture. Start with what ever can be done, do not worry if it is only screw driver manufacturing, just do it and build over time.

Also attract captial like crazy. Ask the left leaning populists to shut their mouth. Devalue currency and make trade the top most priority.

"Attract capital like crazy".... easy to say, but Indian govt and its heavy statist intervention and piecemeal reform continues to heavily distort basic price signalling transmission vis a vis the world (an extension of its crappy fiscal handling internally with levers it has as its hands at the federal level....as it always prefers bureaucrats which get a vote at low resolution of once every 5 years at best depending on the layer....compared to daily feedback voting that market forces involve).

Simply devaluing the INR and having the RBI selectively intervene to only have INR devalue over time like it has is also heavy handed lever that has its costs...given more rupees have to be forked over for same amount of capital import (and transient managers and IP and everything involved in this).

No one in charge really fundamentally asks how elastic/inelastic India's service export sector is (which doesnt even enter RBI decision making unlike commodity), much less analyse it....to then work inside-out properly at current snapshot.

They prefer to tack on things in a brochure way "outside-in" in order to do some mimic thing with rest of world, esp the developed world (all the high incomes) and China (largest middle income) which are way different with the integrals here they have progressed on.