India vs. China: Global Manufacturing

The hourly labor cost in India for manufacturing averages 92¢, compared with $3.52 in China, according to Boston Consulting Group. But, says Anil Gupta, a professor at the University of Maryland’s Robert H. Smith School of Business, India hasn’t come close to matching China’s investments in the roads, ports, and power networks that companies want. “Lousy infrastructure essentially eats up any advantage the country may have on the labor front.”

• ID675K • a day ago
  

• India has a long way, at least 5 or more years to go, then it "may be" able to attract annual foreign investment for manufacturing comparable in size to that of China for the following reasons :
  (1)Quoted above. "The hourly labor cost in India for manufacturing averages 92¢, compared with $3.52 in China, according to Boston Consulting Group. "
  This comes from a dubious source, B.C.G.. I have read their comments in favor of one topic or issue in one article, and against the same topic or issue in a different article.
  The hourly labor cost in China varies with the type of manufacturing and location, etc., from less than 50 cents per hour to more.
  (2) India lacks the transportation infrastructure that China has, like roads, highways, railways, ports, air ports, etc., to carry the components, finished products, etc..
  Shipping in India takes much longer and costs more than in China.
  (2013)....................highways...................expressways.........railway
  China.....................5.98 million km..........104,000 km...........103,144 km
  India......................67,000 km ......................1000 km ............64,460 km
  (3) China's middle class and rich is at least several times bigger than India's, according to Forbes, BBC, etc.. Its GDP per capita is over 2 times that of India.
  One of the main reasons foreign businesses manufacture in China is to bypass the trade barriers like tariffs, taxes, etc. to sell MORE to the Chinese middle class and rich.
  (4) Many of China's component manufacturers are located near each other, while those in India are scattered. Getting the tens to thousands of separate parts to manufacturers is faster, more economical and easier than in India.
  Try that in India.
  (5) India is short of electricity. Brownouts (below normal voltage) are very common.
  Blackouts (no electricity) though less often than brownouts, happened frequently and recently in August 2014.
  http://www.bloomberg.com/news/...
  China produced 5362 terawatt-hours of electricity in 2013, 5 times as much as India's 1103 terawatt-hours in 2013.
  (6) China's pool of skilled workers like welders, machine operators, etc. is much bigger than that of India.
  (7) Land acquisition problems in India caused by local opposition, like the ones faced by Posco (Korean steel maker), Areva (European nuclear reactor builder ), etc.
  ( Unclear or unfavorable laws in India on foreign businesses.
  (9) Etc..
  Unless your manufacturing is very labor-intensive and uses very few components shipped from elsewhere, you can forget about India for now.