India should take advantage of the New World Order

The latest tensions between China and Taiwan have provided further alarm to the Global recession. The world is economically struggling after the pandemic and the ongoing conflict between Ukraine and Russia is adding to the gloom. Globalization is now turning into the de-globalization of trade. Either way, we will see the world moving away from China in the future, and the immediate effects are unlikely to be good for the global economy, including India. China viewed Pelosi’s visit to Taiwan as a conflict with their territorial integrity. Considering Taiwan as an autonomous party, the PLA has already affirmed to recover them with force.

The repercussions caused by this visit not only heightened global tensions, but also fueled the ongoing recession. The impact will halt the economic recovery. As the USD faces a recession due to continued uncertain events, India is also expected to experience a continued decline in the value of INR. Apart from the geopolitical crisis, the reduction in capital outflow and investment has mainly upset the economies of India and the United States. Rising inflation, fuel prices, unemployment and recession are also expected to spread across the globe. The decline in the supply chain of semiconductor products and services will tend to disrupt the automotive industry. It will also have an impact on the automotive industry as well as the production and supply of electric cars. Taiwan holds 64% of the global semiconductor and export market and is a hub for auto parts manufacturing. This will have a negative impact on the automotive industries and will have a negative impact on production and income and therefore the contribution of GDP to the economy.

How should India negotiate its way?

It should not go unnoticed that the United States reflects its superpower by eliminating the leader of Al-Qaeda Ayman al-Zawahiri in Kabul, Afghanistan, while carrying out diplomatic visits at the same time to acquire supremacy. These signs are good enough to compel India to seek its capacity building and improve its logistics and industrial infrastructure. At the same time, maintaining bilateral diplomatic talks in the partnerships is another crucial task for India to steer its economic might. Another important aspect to stimulate economic conditions is to enter an organized economy and stimulate investment and savings in banks. The economy needs to gain an organized sector to have investments in the circular economy. The continuous flow of money enables the contribution to nation building. We expect major economic recession and even stagflation, but India’s decision should be to be an observer without any commitment.

Semiconductor crisis in India started in 2020 and many car manufacturers are facing crises and shortages in car production resulting in waiting period for customers. Indian mining company Vedanta has planned to invest in two units, but with the uncertainty of India’s geopolitical situations and socio-economic status, one can speculate on long-term benefits and short-term caution.

Finally, after securing approval for a massive Rs 76,000 crore plan to set up semiconductor factories in the country, the IT and Electronics Ministry has yet to approve the plans. requests. The India Semi-Conductor Mission is expected to expedite the decision which has been pending for almost 6 months. The ISM will further feed many other sectors in India and hence the ministry is expected to reopen the program for new applications and should also leverage its production line in Mohali.

(The author is the founder of EvoluTioon Strategies, a thought leader, an IIM-L alumnus, a speaker, and a former military officer)