India in an excellent position to serve emerging economies
By admin June 26, 2014 6:47 am IST
India has a large working population which can be a competitive advantage for labour intensive manufacturing
German companies have always shown faith in Indian market. Moreover, today they are increasing their investments considering the advantageous situation present in India. Rajesh Nath explains some favourable conditions for India to be global manufacturing hub in future.
More population more employmentIt has become common to often make emphatic claims that India is set to become the next major global manufacturing hub. However, attaining this goal needs a realistic view, considering the myriads of problems the manufacturing sector is facing today, amidst growing concerns of global economic slowdown, poor infrastructure, volatile currency fluctuations and inflexible labour laws.
India has a large working population which can be a competitive advantage for labour intensive manufacturing. The ability to right-size and downsize employment, aligned to the market demands for the products manufactured in India, is imperative, if we are to grow our manufacturing operations in India. Also the laws in India should facilitate the same with due provisions inbuilt to protect workers interest and avoid exploitation. It will create more employment opportunity and encourage activity in India.
Fillip factorsIndia offers potential investors in the manufacturing sector a number of competitive advantages. India’s own domestic market is large, with over 600 million rural consumers. Workers’ wages in India are less than half of those in China. India has a large talent pool including a strong engineering eco-system.
From a strategic point of view, growth in the coming decades will come from the developing world. India is in an excellent position to serve emerging economies in Latin America, Africa and elsewhere in Asia. Currently, that represents 11 per cent of India’s export market, but it is set to grow dramatically.
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