Posted on July 26, 2016
When it comes to shipper enthusiasm for sourcing and tapping domestic consumers, India has generally played second-fiddle to China. That’s changing. China’s aging workforce and its demands for higher pay and promised pensions, together with a general restructuring of the economy as it moves further into the middle-income bracket, is making room for competition in manufacturing for international consumption.
At the same time, India Prime Minister Narendra Modi is putting a more business-friendly face on India, helping to attract the likes of electronics manufacturers Foxconn and Apple, and pushing domestic production. Although India hasn’t delivered that domestic production as promised, its GDP growth of 7.6 percent last year outpaced China’s rate of 6.9 percent, and shows few signs of slowing.
The manufacturing sector accounts for just 15 percent of GDP in India, well below that of East Asian countries, including South Korea and China, where it’s about 30 percent. While it vies for a larger presence in global politics and military might, India wants to be a bigger producer. It wants to double its exports and emerge as a formidable player in global trade in five years.
“India is working to increase the share of manufacturing as a percentage of GDP and we are seeing a shift in the attitude of global manufacturers toward the country, said Rajiv Biswas, chief economist for the Asia Pacific at IHS Markit, the parent company of JOC.com.
Source: JOC.com
