Why is Indian manufacturing so behind compared to China ?
I geniually want to understand why we are behind in manufacturing ? Although I'm from commerce background but I would love to know how does one start manufacturing business in India ?
What type of engineers you need ? Honestly I don't have any clue but if any has some information pls discuss here.
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Autocracy vs democracy. China got to manipulate its currency for two decades at a stretch - got it pegged at 6 remnibi to usd keeping exports cheap, influenced/lobbies/spied at the highest levels in the US government for decades (look up Larry Wu Tai). This meant unbelievably high USD inflow into China for decades. Chinese nationals who emigrate to US are loyal to China, steal IPs, some are even PLA trained - look up PLA members posing as students in ivy leagues. China pays up American profs to work for them (look up collaborations of Wuhan institute of virology). Their communist background helped since most American institutions are infiltrated by communists thanks to Russia paving the way - so much that they got US to dethrone ROC (Taiwan) from UNSC. Till today, US does not recognise Taiwan as an independent nation despite the grandstanding. Not saying this is all wrong, but they played geopolitics very well over decades and got loyal, nationalistic citizens.
If they have to build an eight lane road they wouldn't have to worry about farmer protests. Implementing farm laws do not require handling protests. Just stating difference between autocracy vs democracy
Can't india gov play same book ?
Manufacturing needs better connectivity infra, very reliable electricity and water supply, less bureaucracy, easy tax rules and cheap but skilled Labour.
Let me take China: the cost to transport something from the deepest inland factory in China to a port in US is cheaper than to transport the same between two states in India. Chinese goods are cheaper in US then even from Mexico due to the most smooth roads, rail and shipping ports. India's roads are not as super, we even had customs intra state before GST.
Until this is solved, all other factors are moot, so let's not even get to them.
Damn.
You haven't addressed how China got there. They didn't have the logistical setup to be the manufacturing hub. That came later.
Question is how did they get there, and why can't we.
China had Deng Zioping, the visionary leader...
India had Indira Gandhi in whose regime, taxation rate was 97.5% for rich ... Our "socialist"politicians like Lalu and Nitish still don't want to be photographed with any industrialist because it will harm their "Socialist" image ... Bihar be damned
Lazy workforce and half knowledge talent who always look at jugaad attitude.
Just see businesses , I was talking to SMB cusotmer I will employee a guy for 10k with excel knowledge. I don't need software.
I think half knowledge is main culprit.
I disagree. Not lazy workforce, but educated workforce/ecosystem. You cannot run sweatshops like china in big scale. We do have sweatshops but they are small in size. Small size doesn't have economies of scale..
Jugaad attitude is because people who invest money want immediate profit. No one wants to do things long term. And not to mention almost zero R&D. Our companies have a R&D decision only for tax purposes.
This is why even in IT, we prefer trading and copy ideas of the west. 25+ years and still we do not have a decent globally accepted software. Politically inclined deals is what's runs out factories.
Lastly bureaucracy, our laws are meant only for harassment. So when the promoter knows he has to grease palms at any moment, he isn't inclined to think long term
Because, if we open manufacturing say for eg. In Karnataka, the state govt will demand that 80% of all those jobs goto Kannadigas, then the local kannadiga population will threaten, bully, beat outsiders for coming to their "beautiful" cities. Then the factory owner will have to employ these same illiterate useless kannadigas.
But the kannadigas know they didn't deserve it and were able to bully, best threaten their way into their jobs, so they have no need or desire to work hard or maintain standards. Result? Inferior products being created
Replace this with any state, we are all protectionist, countries within a country, feudal medeival minded subservient people. Not just to foreigners, but rather any godman/fancy dress champion and we will continue on this path forever.
You forgot about the cut to be given to babus at each step of legal procedure
Wtf, I didn't knew such problems exist in terms of laws. We so backward man. Thanks for info
It's all in education. In Chinese society all types of engineering are appreciated equally, taught equally. In India, everything evolves around software only. This is the 90% reason for this failure. All other analysis can fall under the remaining 10%
Everything revolves around money*
I disagree. Quite a lot of Chinese socio-economic idiosyncracies are similar to India - corruption, parental pressure, apathy, societal pressure etc. In fact, a lot of these qualities are typical in a low income society, which China was.
What's curious indeed is how they got out of that rut collectively
We are not behind in capabilities, we are behind in adoption
So how can we fill the gap asap according to you?
Pick a small industry, where you can have good level of robotics arms to improve efficiency by 5x
Automate the complete flow, no human intervention. My aim will be to minituarise this flow so that I can setup such units across the country. Manufacture on demand for things now white label and personalised with influencer may be.
Goal should be to maximize the ROI of units or become a cloud manufacturing unit.
FOR EX: see urban space episode of sharktank.
A few things -
- Lack of focus on education after independence. Policymakers discounted the need for education amongst the masses, mostly for communities working as daily laborers. E.g., China has 10+ universities that are present in the top 100 global universities and India has none.
- License Raj until the 1990s. India was late in implementing liberalization and opening its economy to the world.
- Poor tariffs for imports/ trade policies. As an example, tariffs were still hurting the electronics industry in India until a few days back when the govt. decided to slash the tariffs on electronic component imports
- Though democracy cannot be discounted for a country like India, it may be possible that democracy has slowed the pace of aspects like land acquisitions required to promote growth
- Centralization of power led to a lack of incentives for the local governments to identify and promote the strengths and competition.
Having sourced from China for a long time I know first hand that it is not one factor it is a whole lot of stuff that China cleverly put together to create a perfect storm. I remember Narasimha Rao as PM saying in Davos then that India has equal capability but we will grow with social justice only and respect labour laws. But the contrary part to this social laws bit is that commies of Russia and China works hard in India thru trade unions to disrupt factories. Even today the apple factory in chennai faced a one day tools down for higher wages. In China that will never happen. China in short subsidised input costs as well as managed exchange rates and created great great infrastructure to enable manufacturing. But while travelling to far east it must also be said that eastern people are far more productive per hour of work. They are diligent and focussed and follow instructions to the T. Even in 1990 Thailand had higher min wages by 2x of India but 4x productivity in sea food factories. Also Chinese creativity is marvellous. Basically we Indians are good at soft skills and Chinese at hard skills.