Context-

Indian authorities are facing a dilemma in balancing national security concerns with the urgent need for Chinese technical expertise to boost productivity across various industries. Despite acknowledging a significant skill gap and the necessity of foreign knowledge to advance its manufacturing sector, India’s restrictive visa policies for Chinese professionals are hindering its economic progress.

The Demand for Chinese Technicians

●     Acknowledgment of Skill Gap

Indian authorities have pledged to issue more visas to Chinese technicians, whose expertise is crucial for Indian businesses. Rajesh Kumar Singh, Secretary of the Department for Promotion of Industry and Internal Trade, acknowledged that there is a “significant skill gap” between Chinese and Indian factory supervisors and workers. A shoe manufacturer from Vellore highlighted that Chinese professionals are “highly productive” and can “help you produce 150 items with the same resources with which we produce 100”. This sentiment is echoed by the chairman of the Engineering Export Promotion Council of India, who has also called for more visas for Chinese technicians.

●     Idle Machines and Unfulfilled Orders

Indian businesses, from footwear and textiles to engineering and electronics, have purchased machines from China but are struggling to use them efficiently without Chinese technical assistance. Industry leaders frequently remind officials that machines are lying idle and export orders remain unfulfilled. For instance, Gautam Adani’s solar manufacturing facility is waiting for Chinese workers to arrive.

●     Importance of Recognizing the Skill Deficit

The official recognition of India’s skill deficit is significant. It is clear that even “low-tech,” labor-intensive production requires substantial expertise. Over the past 40 years, China has developed this expertise to become a global manufacturing hub, and their experts are less expensive than those from other countries. Despite the need for international experts, the Indian government restricts Chinese technicians due to national security concerns, which poses a problem. Chinese expertise could help India establish itself on the lower rungs of the global skills ladder, which are rapidly rising. India needs to act now to avoid missing this opportunity.

Visa Restrictions and Security Concerns

●     Decline in Visa Issuance

In 2019, Chinese nationals received 200,000 visas to India, but this number dropped sharply after deadly clashes between Indian and Chinese troops in 2020. Indian officials accused the Chinese of violating visa conditions and laundering money to evade taxes. By last year, the number of visas granted to Chinese personnel had fallen to 2,000. A security-driven mindset has taken root, and even the 1,000 visas for Chinese electronics professionals this year are stuck in a “pipeline” undergoing “intensive screening”.

●     Rigorous Screening Processes

Despite assurances from Commerce and Industry Ministry officials, a cabinet minister who chose to remain anonymous tempered expectations by stating, “Visas will be issued for Chinese technicians and businessmen only after screening with assurance that travel conditions will not be violated”. This rigorous screening could effectively halt the initiative.

●     Impact of National Security Argument

The powerful national security argument is often couched in the rhetoric of “Atmanirbhar Bharat”, a vision of self-reliant Indian manufacturing. However, this notion of self-reliance is ironically misplaced when India’s economic growth increasingly depends on foreign expertise, particularly from China.

The Importance of Foreign Knowledge

●     Lessons from East Asia

East Asian economic history teaches us that foreign knowledge is pivotal for development when combined with an adequately educated domestic workforce. The weak state of Indian education makes foreign expertise even more critical. In the 1980s, Korean businesses bought foreign machines to dismantle and reverse engineer them. By that time, Korea had nearly three decades of a solid educational foundation and needed minimal human assistance. They primarily sourced foreign knowledge embodied in machines.

●     China’s Rapid Development

China started its explosive growth in the early 1980s with a weaker education base than Korea’s. However, the quality of Chinese primary education during the Communist era had prepared the country for rapid development, as predicted by a World Bank report in 1981. To enhance domestic capabilities, Deng Xiaoping, known for his economic reforms and the Tiananmen Square incident, sent senior policymakers on international study tours and sought foreign investors willing to bring global knowledge to China. This interaction between domestic and foreign knowledge propelled China to become the world’s manufacturing hub.

●     India’s Educational Shortcomings

In contrast, India built more schools and increased enrollment, but surveys of learning outcomes show that schools have often failed to educate the children. According to Stanford University’s Eric Hanushek, only about 15% of Indian school students possess the basic reading and arithmetic skills required for an international economy, compared to 85% of Chinese children.

The Red Queen Race

●     China’s Continuous Advancement

China, despite its faults, has learned the lesson imparted by the Red Queen in Lewis Carroll’s "Through the Looking Glass": one must run twice as fast to stay in the same place and even faster to get ahead. Chinese universities are among the world’s best, especially in computer science and mathematics. Chinese scientists are making significant advances in various applied sciences relevant to industrial progress. As a world leader in electric vehicles and solar technology, China is poised to excel in artificial intelligence.

●     Western Protectionism

China’s advancements have captured the attention of western leaders, who, instead of addressing their own educational shortcomings, are building trade barriers against Chinese imports, claiming unfair competition. Such protectionism, even when called “industrial policy”, will not fix the fundamental flaws in their education systems.

●     Misguided Optimism for India

Indian and international elites seem unable to learn from China’s example. Economists Rohit Lamba and Raghuram Rajan have mistakenly given up on generating Indian jobs for the vast global market for labor-intensive products. They argue that India should focus on technology-enhanced service exports, ignoring the small base of high-quality Indian university education. The decay of Delhi University, as described by historian Mukul Kesavan, is a poignant reminder of this issue

The Reality in India

●     Stagnation in Technology-Related Service Exports

India’s surge in technology-related service exports during the COVID-19 years has stalled. Even graduates from the Indian Institutes of Technology are struggling to find jobs. Many workers in Bengaluru’s IT sector, particularly in support, maintenance, and basic coding roles, are now seeking opportunities in the gig economy. IT jobs, which peaked at just over five million in 2023, are now declining, a concerning trend given India’s working-age population of a billion and a workforce of 600 million.

●     Overestimated Economic Prospects

Despite this, Martin Wolf of the Financial Times predicts that India is on course to become a global economic superpower. However, India’s inability to educate its children and provide dignified jobs to its vast population suggests otherwise. India has almost missed the China-plus-one window, an opportunity seized by Mexico and Vietnam due to their strategic locations and exceptional human capital. Foreign investors are shying away from India, and the country’s labor-intensive manufactured exports remain stuck at a 1.3% share of global markets, below Vietnam’s share.

●     Potential Missed Opportunities

If national security and self-reliance mantras block even the small step of granting visas to relevant foreign experts, India will miss another opportunity for a fresh start. Without addressing its severely deficient human capital, any prospect of labor-intensive manufactured exports will die again. India must focus on improving its education system rather than harboring unrealistic notions of its place in the world. The global Red Queen race is intensifying, and more windows will close as millions of Indians await dignified jobs.

Conclusion

To harness economic growth and compete globally, India must reconcile national security concerns with the urgent need for Chinese expertise, while significantly improving domestic education. Embracing foreign knowledge and addressing educational shortcomings are essential to securing a prosperous future and creating dignified jobs for its vast population.

Source- The Hindu