Thousands of Hindu Gods – Made in China. Seven Reasons Why India's Manufacturing Competitiveness Lags China's

Abstract

Despite a supply chain extending 7,367 kilometers, and Chinese labor costs that significantly exceed those in India, thousands of Hindu gods are manufactured in China and shipped to the Indian market, outcompeting local producers. This article asks if China subsidizes its exporters, and identifies seven bottlenecks impeding the competitiveness of Indian manufacturers. India has had a more than 2000 year history of entrepreneurship. Yet, it was only in 2014 that the Modi government launched its “Make-In-India” campaign to further Indian manufacturing and exports. The issue is critical because each year around 20 million Indians attain the age of 18, and most look for jobs. The Modi government needs to do something stronger to avoid turning the vaunted “demographic dividend” into a demographic time-bomb. With rising labor rates in China, and a strengthening Yuan, can (or should) India try to take over from China the mantle of “factory of the world”?

Keywords: India, China, Trade, Manufacturing, Globalization, Global Trade, Competitiveness