New Mantra of Globalisation – Producing cost effectively by global companies locally in consumer economies?!?!

Published on : April 20, 2020

Author : Raj Shroff

The process of globalisation was already in retreat-it is being referred as ‘slowbalisation’. With this pandemic, vulnerability that global economic interdependence creates on supply chain has been recognised. The Governments have already started to give incentives to push local manufacturing and job creation to kick-start the revival of their economies. On the other hand, companies will be looking at countries like India to move their low cost base.

In the post COVID19 era, countries will reconfigure their economies to look at the perils and pitfalls of overdependence on cheap import. We believe production of intermediates to some extent, final goods to a large extent and essentials completely will move back to their region but production of basic and intermediate goods to a large extent will remain in low cost countries.

The result will be increased investments in ‘consumer’ economies by local and global companies. This in our view will lead to spurt in increase in M&A/investment in consumer economies and low cost countries (ex China) by MNCs. Are you ready for the post Covid19 era???