The past four decades of economic growth in China was partly due to Japanese, Taiwanese, South Korean and Hong Kong owned companies operating from China. 50% share of exports of goods from China to the rest of the world come from foreign companies operating from China.
Chinese workforce has also benefitted greatly from this inward investment in China in terms of training and skills in manufacturing processes. Labour costs are now rising in China while Indian labour costs could be lower in comparison.
Apart from China, India needs to attract any foreign owned company that is technically more advanced than India who wishes offshore whole or part of their manufacturing operations.
In the service sector, India is already doing well. But not in the goods sector yet. It would be interesting to find out what percentage of export of goods (as opposed to services) from India to the rest of world come from foreign companies operating in India.
Does India need to emulate China in this strategy?
Nagindas Khajuria
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