Manufacturing in India
Ok, most of you know that I try to buy things such as shoes and clothes whenever I am in India in order to support Indian manufacturing. You also probably know that when I do buy things in the United States, I search intensively in order to try and find something that is not made in China. I am proud to say that after about an hour of searching through hiking boots at the Franklin Mills Mall, I finally found a pair of boots made in Thailand.
Naturally, one would conclude from this that India's export industry isn't all that it could be. However, it used to be that most everything that is bought in India is made in India. But I was dismayed to see in India this year that Chinese goods were relentlessly advancing upon this frontier as well. The Rs. 35 wall adaptor ($0.75) that I bought was Made in China. My wireless internet router provided by BSNL is made in China. The Rs. 100 ($2.15) headphones / microphones set which I recently bought was made in China. There is an abundance of Chinese made shoes in the Reebok and Nike outlets (although there are a significant amount of Indian made shoes as well, I think all Indian made shoes are consumed domestically, meaning that production is not enough even for domestic demand, let alone export). As far as any electronic products, cell phones, computers, digital cameras, they're all made in China.
I had pretty much resigned myself to industrial oblivion for India, when I read this article in The New York Times. I found a number of things in the article worthy of comment.
"For decades, India followed a route to economic development strikingly different from that of countries like Japan, South Korea or China. While its Asian rivals placed their bets on manufacturing and exports, India focused on its domestic economy and grew more slowly with an emphasis on services."
Even this isn't really true. The emphasis on services started only after economic liberalization in 1991, before this, government jobs and jobs in factories stifled by socialist manufacturing quotas were pretty much the only options.
"A prime reason India is now developing into the world’s next big industrial power is that a number of global manufacturers are already looking ahead to a serious demographic squeeze facing China. Because of China’s “one child” policy, family sizes have been shrinking there since the 1980’s, so fewer young people will be available soon for factory labor.
"Plenty of obstacles remain, however, notably India’s weak infrastructure. China invests $7 on roads, ports, electricity and other backbones of a modern economy for every dollar spent by India — and it shows. Ports here are struggling to handle rising exports, blackouts are frequent and dirt roads are common even in Bangalore, the center of the country’s sophisticated computer programming industry."
Dirt roads in Bangalore? Ok, that's poetic license there. Bangalore's roads are far better than dirt roads. They made Bangalore sound like a city in some banana republic somewhere. Yes, many of them are potholed and need to be greatly improved, but the improvement projects are underway. And no, we may have dirt roads towards the edges of the city, but the roads within the city are all tarred and the majority of them are in a decent condition. That said, the roads in rural areas is another issue entirely and if goods are to be transported efficiently between places, then improvement needs to be expanded way beyond the current Golden Quadrilateral, which only links the major metros with world class roads.
"“The Chinese are very good at copying things, but Indians believe in quality work, we believe in meeting pollution norms,” said S. S. Pathania, the assistant general manager of the Hero Honda motorcycle factory in Gurgaon, 30 miles south of New Delhi."
This is funny, but yes, when I think of low quality products, I immediately think of Chinese products. It's ingrained in our psyche, that Chinese products are low quality, cheap, mass produced products during the manufacturing of which, the environment has been thoroughly destroyed.
As for Indians meeting pollution norms, I really can't say how true that statement is. While a few high profile companies such as Hero Honda may meet pollution control standards and their vehicles may meet those in the West, the vast majority of Indian industries continue to work without much oversight. No, industrial pollution in India is nowhere near as bad as China, but that's natural in a democracy where a government cannot turn a blind eye while it's people are poisoned. We don't have the military junta-type government that China touts. We don't kidnap our Tibetan monks and attempt cultural genocide either, but that's an entirely different topic.
"Hero in Gurgaon, on the southern outskirts of New Delhi, and its archrival, the Lifan Group in Chongqing, a city in western China, produce comparable motorcycles but the similarity ends there. Hero markets heavily to its domestic market, protected from foreign competition by high import tariffs, while Lifan emphasizes exports.
Naturally, one would conclude from this that India's export industry isn't all that it could be. However, it used to be that most everything that is bought in India is made in India. But I was dismayed to see in India this year that Chinese goods were relentlessly advancing upon this frontier as well. The Rs. 35 wall adaptor ($0.75) that I bought was Made in China. My wireless internet router provided by BSNL is made in China. The Rs. 100 ($2.15) headphones / microphones set which I recently bought was made in China. There is an abundance of Chinese made shoes in the Reebok and Nike outlets (although there are a significant amount of Indian made shoes as well, I think all Indian made shoes are consumed domestically, meaning that production is not enough even for domestic demand, let alone export). As far as any electronic products, cell phones, computers, digital cameras, they're all made in China.
I had pretty much resigned myself to industrial oblivion for India, when I read this article in The New York Times. I found a number of things in the article worthy of comment.
"For decades, India followed a route to economic development strikingly different from that of countries like Japan, South Korea or China. While its Asian rivals placed their bets on manufacturing and exports, India focused on its domestic economy and grew more slowly with an emphasis on services."
Even this isn't really true. The emphasis on services started only after economic liberalization in 1991, before this, government jobs and jobs in factories stifled by socialist manufacturing quotas were pretty much the only options.
"A prime reason India is now developing into the world’s next big industrial power is that a number of global manufacturers are already looking ahead to a serious demographic squeeze facing China. Because of China’s “one child” policy, family sizes have been shrinking there since the 1980’s, so fewer young people will be available soon for factory labor.
India is not expected to pass China in total population until 2030. But India will have more young workers aged 20 to 24 by 2013; the International Labor Organization predicts that by 2020, India will have 116 million workers in this age bracket to China’s 94 million."
Is this something to be proud of? I don't think there's anything to proud in the fact that our population is expanding faster than China's, and we certainly shouldn't use the prospect of more industrial jobs as a reason to abandon what family planning measures we have now."Plenty of obstacles remain, however, notably India’s weak infrastructure. China invests $7 on roads, ports, electricity and other backbones of a modern economy for every dollar spent by India — and it shows. Ports here are struggling to handle rising exports, blackouts are frequent and dirt roads are common even in Bangalore, the center of the country’s sophisticated computer programming industry."
Dirt roads in Bangalore? Ok, that's poetic license there. Bangalore's roads are far better than dirt roads. They made Bangalore sound like a city in some banana republic somewhere. Yes, many of them are potholed and need to be greatly improved, but the improvement projects are underway. And no, we may have dirt roads towards the edges of the city, but the roads within the city are all tarred and the majority of them are in a decent condition. That said, the roads in rural areas is another issue entirely and if goods are to be transported efficiently between places, then improvement needs to be expanded way beyond the current Golden Quadrilateral, which only links the major metros with world class roads.
"“The Chinese are very good at copying things, but Indians believe in quality work, we believe in meeting pollution norms,” said S. S. Pathania, the assistant general manager of the Hero Honda motorcycle factory in Gurgaon, 30 miles south of New Delhi."
This is funny, but yes, when I think of low quality products, I immediately think of Chinese products. It's ingrained in our psyche, that Chinese products are low quality, cheap, mass produced products during the manufacturing of which, the environment has been thoroughly destroyed.
As for Indians meeting pollution norms, I really can't say how true that statement is. While a few high profile companies such as Hero Honda may meet pollution control standards and their vehicles may meet those in the West, the vast majority of Indian industries continue to work without much oversight. No, industrial pollution in India is nowhere near as bad as China, but that's natural in a democracy where a government cannot turn a blind eye while it's people are poisoned. We don't have the military junta-type government that China touts. We don't kidnap our Tibetan monks and attempt cultural genocide either, but that's an entirely different topic.
"Hero in Gurgaon, on the southern outskirts of New Delhi, and its archrival, the Lifan Group in Chongqing, a city in western China, produce comparable motorcycles but the similarity ends there. Hero markets heavily to its domestic market, protected from foreign competition by high import tariffs, while Lifan emphasizes exports.
With scant ventilation, Lifan’s factories are filled with diesel exhaust as workers test engines and ride finished bikes at breakneck speed out the doors, zigzagging past co-workers. Hero’s factory in Gurgaon, where Honda holds a minority stake, has far better safety standards and excellent ventilation.
The Lifan factory pays less than $100 a month. The heavily unionized Hero factory pays $150 a month plus bonuses of up to $370 a month; nearly half the workers earn the top bonus, Mr. Pathania said.
Lifan’s labor force is quiescent — would-be organizers of independent labor unions face long jail terms or worse in China. Hero’s workers staged a successful nonviolent protest in 2005 to call for more contract workers to be eligible for the bonuses as well."
This is perhaps the most encouraging part of the article. While Hero Honda is more the exception than the norm, like I said, laws and regulations, while being nowhere near as strict as in the West or as they should be, are still better than China, regarding environmental pollution and workers' rights. This doesn't mean exploitation doesn't exist in India, it still does, at unacceptably high levels. So does environmental degradation. But there is a far better chance at improving these things in India. It all boils down to the fact that the concept of "human rights" exists in India while in China, it does not.
posted by Vivek at 9:54 PM
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