India is all set to win back the manufacturing territory it had lost to China. The dragon nation is fast losing its competitive edge due to rising labour costs. These have more than doubled during 2003-09 in China compared to a moderate 40% rise in India during the same period. China's one-child policy and the resultant shrinking workforce are to be blamed. This clearly places India at the forefront as no other country has comparable human resources. Steady appreciation of the Chinese Yuan has also made Chinese exports costlier.
India is now more attractive in segments such as electrical goods, household goods and textile. Indian manufacturers are set to get incremental business in both the domestic as well as the foreign markets. This is evident from the fact that India's export of electronic goods surged 56% while its import of Chinese electronic goods fell 32% during FY11. MNCs will also step up investment in capacity expansion in India. Manufacturing growth in these sectors and the related vendor eco-system will lead to overall economic development and more revenues to the exchequer. While it is still pre-mature to quantify the benefits, it is nevertheless news to cheer for India Inc.
By J Mulraj
No comments:
Post a Comment