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Can “made in India” replace “made in China” as a “factory of the world”?

One of the “New year’s resolutions” of Indian Prime Minister Modi on 2015 was to make India a world manufacturing center comparable to China. In a twinkling of an eye, 2/3 years passed in 2015. Modi’s ambitious plans have not improved. edm machining services China edm machining services Wholesale Manufacturer

“Made in India” wants to catch up with China

India’s prime minister Modi in September 2014 launched the “India manufacturing” plan, committed to reducing the threshold to start a business in India, in order to attract foreign investment. He wants to use the India abundant raw materials and huge human capital, will become the third largest economy in Asia as China manufacturing as the giants. China edm machining services Wholesale Manufacturer

According to the disclosure of government data, manufacturing China contribution to the economy as high as 32%, while in agricultural India, manufacturing industry’s contribution to GDP only 17%. even in Thailand, the manufacturing industry contribution to the economy is as high as 34%. modi’s goal is through the “India manufacturing” plan, improve the contribution of manufacturing to GDP to 25%, and provide jobs for nearly 13 million a year in new labor population.

Since 1995, “China manufacturing” let the people of real wages rose more than 400%, the poverty rate of nearly 50% from the beginning of the new millennium fell to 18.6%.< in 2011 Wall Street journal pointed out that even if the Chinese economic slowdown, 2013 still created 13 million 200 thousand new jobs, and each of the 12 million India young people entering the labor market barely, in which nearly tens of millions of jobs.

Moody’s hopes that “made in India” can bring the same surprise. However, some experts believe that the 20 year time difference is likely to make India miss the window period for manufacturing to create wealth. “India manufacturing” can only take a different strategy.

Modi himself is not a great economist “, but his plan pointed out that the India based manufacturing industry pain points in.1992, developing manufacturing output accounted for only 18% of the world, by 2012, this figure has reached 35%. in the 2013 global export in India accounted for only 1.7%, 0.5% higher than in 1990, but far behind in China 11%. India wants to develop in the manufacturing industry fist, facing the competition and challenge more than 20 years ago, more intense. Bangladesh and Vietnam and other Asian countries have been walking in the road by manufacturing successfully build up the family fortunes, integrated into the global industrial chain. edm machining services

India’s manufacturing outlook is low

The ambitious “made in India” programme comes almost a year after India and abroad are busy with a brief summary of it, but the results are discouraging. China edm machining services Wholesale Manufacturer

The problem comes from hard conditions and soft environments.

In terms of hardware, India’s infrastructure severely constrains its manufacturing development, without mature ports, roads and railways to transport goods and reliable electricity. Energy guarantees the operation of factories. Institutions and businesses linked to the government default on bank bills, leaving banks reluctant to lend. Even an adequate population is slackened and unskilled. It cannot be converted into human capital. “Indian companies have hardly achieved real economies of scale,” UK media said. Low productivity tends to nullify the theoretical advantage of cheap labor, “the Boston Consulting Group reported on 2014, taking into account overall costs. The cost of manufacturing in India is only five cents lower than in Mexico.

Mr Modi’s chief economic adviser, Mr Subramanian, argues that India has to some extent missed the opportunity because it is wasting its obvious comparative advantage-cheap labour, the Financial Times added. The golden age of manufacturing as a tool for development is over, given the rapid mechanization and the world’s flood of cheap goods.

Given all this, the outlook for Indian manufacturing is low. Even the expression “made in India” doesn’t sound right, the Financial Times said.

Government reform is not “strong”

More bad and difficult to change, the soft environment of India. In this country, factory owners want to get the land that is needed, to have all sorts of twists and turns. The factory is built, but also spend a lot of energy and labor law wits, cope with the pervasive corruption and tax policy is not reasonable and changeable.

India ranked the 134th in the world bank’s “business easy evaluation” ranking. Modi said a year ago that he hoped that India could rise rapidly in this list and enter the top 50.

India software services exporter MphasiS group before CEO Jerry Rao wrote that hinder India’s bureaucracy on commercial behavior and hatred is more and more intense. He said that no hostility, contempt, suspicion of enterprise politicians are rare. Many politicians focus on business just to get personal wealth.

The development of the manufacturing industry, India has no capital to eat. Even the Indians all despise their own manufacturing, material scarcity has created a patchwork of innovation with characteristics of India. India media commentator Sharma even “black”, “said Indians put parts with tape, paint and pray together.” edm machining services

Australia “dialogue” website, and Chinese compared to business friendly and flexible labor law, labor law and India is full of rigid constraints. From the central to the States, there are about 250 of the labor law of the country, largely restricted to the manufacturing and investment. Such as commercial dispute law > India in 1947 “regulations, corporate downsizing or closing the shopping malls, factories before, must be approved by the government. Even in the uncontrollable factors, or because of the workers’ work efficiency is too low, business owners must abide by the rules. This law limits the business owners to introduce new technology, because some workers may therefore be dismissed.

India’s ruling party hopes to modify the labor law, but the Wall Street journal believes that other developing countries learned that the labor law should not be weakened, but should be simplified. To reduce the minimum wage and labor rights is to sacrifice, population welfare not sustainable consumption.

Besides, for India, it is another practical problem to ensure the employment rights and interests of the workers through guaranteeing the rights and interests of the laborers. The women in the labor market of India have decreased from 29% to 24%. in the past 10 years, compared with 44% of the working age women in the workplace.

At the same time, India’s investment in labor training is also seriously insufficient. From.2007 to 2025, 300 million young people in the country enter the labor market, while the manpower training budget is only 3 million 100 thousand yuan per year (19 million 770 thousand yuan).

When Modi launched the “made in India” program, the public simply did not know what it meant and what it meant. Some people thought it was a call to “boycott foreign goods and support domestic products.” Others see it as an empty slogan used as a performance project. Even a Japanese official based in Delhi told the Financial Times that the campaign was more specific. It is to persuade Indians not to buy any goods imported from China.

Many international executives and investors are complaining that Mr Modi has not taken full advantage of his party’s absolute majority in parliament. A former minister of his party lamented the Financial Times that the phrase “made in India” had become the mantra of an aspiring industrialist. Not much policy change. “in the end, say too much, do less.”

The Economist argues that “made in India” needs truly active business leaders. But at the mobilization conference in which Modi announced the “made in India” plan. The nation watched Indian businessmen speak highly on television, flattering Modi’s “unique charisma” and “the agility that will change the fate of Indians.” “wisdom and vision.” but Modi himself has always been a stern face, no response.

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