{"id":28006,"date":"2014-09-28T11:13:17","date_gmt":"2014-09-28T15:13:17","guid":{"rendered":"http:\/\/quotulatiousness.ca\/blog\/?p=28006"},"modified":"2014-09-28T11:13:17","modified_gmt":"2014-09-28T15:13:17","slug":"this-is-why-you-rarely-see-made-in-india-on-manufactured-goods","status":"publish","type":"post","link":"https:\/\/quotulatiousness.ca\/blog\/2014\/09\/28\/this-is-why-you-rarely-see-made-in-india-on-manufactured-goods\/","title":{"rendered":"This is why you rarely see “Made in India” on manufactured goods"},"content":{"rendered":"

At The Diplomat<\/em>, Mohamed Zeeshan<\/a> talks about India’s self-imposed disadvantages in manufacturing both for domestic and export consumption:<\/p>\n

Indian Prime Minister Narendra Modi\u2019s maiden Independence Day speech was laced with inspiring rhetoric. But of the many things he said, the one slogan that inevitably caught public attention was this: \u201cCome, make in India!\u201d With those words, Modi was trying to make the case for turning India into the world\u2019s next great manufacturing hub. Understandably, the Indian populace was thrilled.<\/p>\n

India is one of the world\u2019s ten largest economies (and is third largest on a purchasing power parity basis), with a total annual output of nearly $2 trillion. As much as 57 percent of this output is produced by a service sector that employs just 28 percent of the population, largely concentrated in urban parts of the country. That is no surprise, because most Indians lack the skills and education to join the more knowledge-intensive service sector. What they need is what successful developing nations all over the world have had ever since the Industrial Revolution: a robust and productive manufacturing sector.<\/p>\n

Yet India\u2019s manufacturing sector contributes just 16 percent to the total GDP pie (China\u2019s, by contrast, accounts for almost half of its total economic output). Victor Mallet, writing in the McKinsey book Reimagining India<\/em>, recently offered an anecdote that was illuminating. \u201cOne of India\u2019s largest carmakers recently boasted that it was selling more vehicles than ever and that it was hiring an extra eight hundred workers for its factory,\u201d he wrote, \u201cBut the plant employing those workers belongs to the Jaguar Land Rover subsidiary of Tata Motors and is in the English Midlands, not in job-hungry India.\u201d<\/p>\n

Mallet goes on to make a point that has been made frequently by Indian economists: The world doesn\u2019t want to \u201cmake in India,\u201d because it is simply too painful. There\u2019s bureaucratic red tape, a difficult land acquisition act, troublesome environmental legislation, a shortage of electricity, and a lack of water resources. The only thing India doesn\u2019t seem to lack is labor, but that merely adds to the problem. As Mallet points out in the same essay, aptly titled \u201cDemographic dividend \u2013 or disaster?\u201d, \u201cIndia\u2019s population grew by 181 million in the decade to 2011 \u2013 and (despite falling fertility rates) a rise of nearly 50% in the total number of inhabitants is unavoidable.\u201d But the number of jobs being added to feed that population is inadequate.<\/p>\n

However, the labor dividend is still important. India doesn\u2019t need to reduce the number of hands on deck. It needs to weed out the challenges that stop them from being productive.<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

At The Diplomat, Mohamed Zeeshan talks about India’s self-imposed disadvantages in manufacturing both for domestic and export consumption: Indian Prime Minister Narendra Modi\u2019s maiden Independence Day speech was laced with inspiring rhetoric. But of the many things he said, the one slogan that inevitably caught public attention was this: \u201cCome, make in India!\u201d With those […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,25,23],"tags":[111,319,497,859,661],"class_list":["post-28006","post","type-post","status-publish","format-standard","hentry","category-bureaucracy","category-economics","category-india","tag-cars","tag-demographics","tag-electricity","tag-manufacturing","tag-regulation"],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p2hpV6-7hI","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/28006","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/comments?post=28006"}],"version-history":[{"count":1,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/28006\/revisions"}],"predecessor-version":[{"id":28007,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/posts\/28006\/revisions\/28007"}],"wp:attachment":[{"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/media?parent=28006"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/categories?post=28006"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quotulatiousness.ca\/blog\/wp-json\/wp\/v2\/tags?post=28006"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}