Indian manufacturers got much less Govt support than China: OECD
New Delhi, June 8: China has been dominating global manufacturing because its manufacturers receive substantial support from the government, much more than in India, according to the latest report of a reputed international grouping — Organisation for Economic Co-operation and Development (OECD).
It used its newly-compiled MAGIC Database of Industrial Subsidies to conclude that between 2005 and 2024, Chinese firms received on average three to eight times more government support than companies based in OECD economies, as well as significantly more than firms in major non-OECD countries such as India, Brazil and Indonesia.
“These estimates are conservative,” said the report of the OECD, which comprises 38 mostly advanced economies including the United States, Japan, Germany and Australia.
The scale of support reflects “one of the key factors behind China’s manufacturing competitiveness,” it said.
The assessment is based on actual subsidies received by firms rather than amounts disclosed by governments, covering 525 of the world’s largest manufacturers across 15 key sectors.
It tracks support through grants, income tax concessions and below-market borrowings, including cheap loans from state-owned banks.
The subsidies played a material role in shaping global market outcomes, the report said.
About 22 per cent of the global market share gains of firms that expanded between 2005 and 2023 could be explained by the subsidies they received, it said.
For China, the impact was far more pronounced. Nearly 60 per cent of Chinese firms’ global market share gains over the period were attributable to government support, the report said.
Growing Opacity:
The study also found growing opacity in global subsidy reporting.
The number of members of the World Trade Organization that failed to notify any subsidies rose to 117 in 2025 from just 26 in 1995, increasing the share of non-reporting members from 23 per cent to 70 per cent and eroding trust in global markets, it said.
Despite receiving lower levels of state support, India was identified as a relatively “clean” player in several sectors covered by the study, including steel, cement, fertilisers, heavy machinery and glass and ceramics, according to the report. (BVI)
