Skip to main content

Terming Modi's effort to rival China difficult and slim, FT cites closure of Nokia plant in Chennai as example

By Our Representative
In an year-end commentary, premier British business daily, “Financial Times”, has termed prime minister Narendra Modi's dream to redouble “India’s efforts to rival China by turning into a global manufacturing hub” as “important to his country’s future” but insists, it is “difficult to achieve”. Written by James Crabtree in the column “Inside Business” and titled “Modi faces uphill battle in mission to see India rival China”, the commentary arrives at this conclusion by saying that “India’s manufacturing frailty is well documented.”
“At just 15 per cent of gross domestic product, the sector is less than half the size of China’s”, the daily points out. Saying that “no poor Asian country has risen to middle-income status with such feeble figures”, the daily gives this as the main reason why Modi's Make in India drive to reach the pinnacle of Chinese-style exporting powerhouse are “slim”.
Conceding that India may have excelled in some “high-tech manufacturing” and “the likes of Ford and Hyundai run world-class local factories, packed with whirring robots”, with many global carmakers starting to see India as “a crucial export base”, the daily insists, “But lower skilled, labour-intensive industries such as clothes manufacturing and electronics do less well, causing alarm in a nation that must create 12 million new jobs a year until 2030 to meet a looming demographic bulge.”
Giving the example of now Nokia plant collapsed in India to prove its point, the daily says, “Until last year, the Finnish technology group ran a large, ultra-modern factory in Chennai, employing about 8,000 workers and exporting products globally. A local supply chain built up around the plant, attracting the likes of Chinese smartphone maker Foxconn. But this was before India’s revenue authorities took an interest. Two disputed tax claims scuppered plans to transfer the factory to Microsoft as part of a global deal. Now it is set to be sold or closed, imperilling workers and suppliers alike.”
“Worse”, the daily says, “Other phonemakers seem unlikely to follow where Nokia failed. Despite rocketing domestic demand, local players such as Micromax rely almost exclusively on Chinese suppliers. China’s Xiaomi plans a research lab in Bangalore as it attempts to grow in India, but no local production until at least 2016. As India seeks manufacturing success, labour-intensive products such as mobile phones should be an ideal fit. Instead, industry groups warn phone exports may drop to zero next year.”
Pointing out that “reversing such trends will be difficult, making the limited progress by Modi’s otherwise laudable Make in India drive all the more depressing”, the daily says, The phrase is often repeated by fawning industrialists, but has prompted scant policy changes.” It quotes Arun Shourie, journalist-turned-BJP politician to prove its point: “When all is said and done, more is said than done.”
The top daily takes issue with well-known pro-Modi economist Arvind Panagariya of the Columbia University, who believes that export-led manufacturing remains India’s best economic hope, saying, Panagariya's view that Make in India campaign only need for far-reaching reforms, such as scrapping outmoded labour and land acquisition laws, may not be easy to achieve, terming them “improbable”.
“Worse”, it underlines, “The nature of Asian manufacturing is changing in ways that make India’s task trickier. Cheap labour is still an advantage. But factors such as logistics and energy costs are increasingly important in persuading global companies to relocate — both areas where India struggles. Even manufacturers facing rising wage bills in China show few signs of moving to India en masse.”
Qouting Reserve Bank of India governor Rathuram Rajan who said that “the world as a whole is unlikely to be able to accommodate another export-led China,” warning against “sneaking in tariffs for favoured sectors under the cloak of pro-manufacturing rhetoric”, the daily says, “India ranks second only to Indonesia in a recent analysis of manufacturing costs across 25 large exporters by consultants BCG. Perversely, the country’s myriad manufacturing barriers should make it possible to remove at least some of those expenses, including the overzealous tax regime that damaged Nokia.”

Comments

Anonymous said…
Nokia is loosing its market world over and being a non indian company preferred its base location and other cheaper location to run its business, so it can not be termed as collapse of hopes. Local mobile market is thriving in the country with emergence of micromax and similar brands. Things are reviving and there is a lot of hope.

TRENDING

Insider plot to kill Deendayal Upadhyay? What RSS pracharak Balraj Madhok said

By Shamsul Islam*  Balraj Madhok's died on May 2, 2016 ending an era of old guards of Hindutva politics. A senior RSS pracharak till his death was paid handsome tributes by the RSS leaders including PM Modi, himself a senior pracharak, for being a "stalwart leader of Jan Sangh. Balraj Madhok ji's ideological commitment was strong and clarity of thought immense. He was selflessly devoted to the nation and society. I had the good fortune of interacting with Balraj Madhok ji on many occasions". The RSS also issued a formal condolence message signed by the Supremo Mohan Bhagwat on behalf of all swayamsevaks, referring to his contribution of commitment to nation and society. He was a leading RSS pracharak on whom his organization relied for initiating prominent Hindutva projects. But today nobody in the RSS-BJP top hierarchy remembers/talks about Madhok as he was an insider chronicler of the immense degeneration which was spreading as an epidemic in the high echelons of th

Central pollution watchdog sees red in Union ministry labelling waste to energy green

By Chythenyen Devika Kulasekaran*  “Destructors”, “incinerators” and “waste-to-energy (WTE) incineration” all mean the same thing – indiscriminate burning of garbage! Having a history of about one and a half centuries, WTE incinerators have seen several reboots over the 19th, 20th and 21st centuries. 

First-of-its-kind? 'Eco-friendly, low cost' sewage treatment system installed in Gujarat

Counterview Desk Following the installation of the Unconventional Decentralized Multi-Stage Reactor (UDMSR) for sewage treatment, a note on what is claimed to be the  first-of-its-kind technology said, the treated sewage from this system “can be directly utilized for agricultural purposes”, even as proving to be a “saviour in the times of water crisis.”

A Hindu alternative to Valentine's Day? 'Shiv-Parvati was first love marriage in Universe'

By Rajiv Shah*   The other day, I was searching on Google a quote on Maha Shivratri which I wanted to send to someone, a confirmed Shiv Bhakt, quite close to me -- with an underlying message to act positively instead of being negative. On top of the search, I chanced upon an article in, imagine!, a Nashik Corporation site which offered me something very unusual. 

Indo-Bangla border: Farmers facing 'illegal obstacles' in harvesting, transporting yields

  Counterview Desk  In a representation to the chairperson, National Human Rights Commission, human rights defender Kirity Roy, who is secretary, Banglar Manabadhikar Suraksha Mancha (MASUM), has said that Border Security Force (BSF) personnel are creating "illegal obstacles" for farmers seeking to harvest their ripened yields and transport them to the market in village Jhaukuthi of Cooch Behar district.

Wasteland, a colonial legacy, being used to 'give away' vast tracts to Ratnagiri refinery

By Fouziya Tehzeeb* William D’Souza, a 55-year old farmer from Kuthethur, Mangalore, was busy mixing cattle feed when we arrived at his doorsteps. Around 25 km from the bustling city of Mangalore, Kuthethur is a lush green village with thick vegetation. On the way to William’s house the idyllic view gets blocked by the flares and smoke arising from the Mangalore Refinery and Petrochemicals Limited (MRPL).

'Flawed' argument: Gandhi had minimal role, naval mutinies alone led to Independence

Counterview Desk Reacting to a Counterview  story , "Rewiring history? Bose, not Gandhi, was real Father of Nation: British PM Attlee 'cited'" (January 26, 2016), an avid reader has forwarded  reaction  in the form of a  link , which carries the article "Did Atlee say Gandhi had minimal role in Independence? #FactCheck", published in the site satyagrahis.in. The satyagraha.in article seeks to debunk the view, reported in the Counterview story, taken by retired army officer GD Bakshi in his book, “Bose: An Indian Samurai”, which claims that Gandhiji had a minimal role to play in India's freedom struggle, and that it was Netaji who played the crucial role. We reproduce the satyagraha.in article here. Text: Nowadays it is said by many MK Gandhi critics that Clement Atlee made a statement in which he said Gandhi has ‘minimal’ role in India's independence and gave credit to naval mutinies and with this statement, they concluded the whole freedom struggle.

CAA disregards India's inclusive plural ethos, 'betrays' ideals of freedom struggle: PUCL

Counterview Desk    "Outraged" at the move of the Central government to implement the Citizenship Amendment Act, 2019 (CAA 2019) weeks before the election, the top rights group, People's Union for Civil Liberties (PUCL), has demanded that the law be repealed. 

Buddhist shrines were 'massively destroyed' by Brahmanical rulers: Historian DN Jha

Nalanda mahavihara By Our Representative Prominent historian DN Jha, an expert in India's ancient and medieval past, in his new book , "Against the Grain: Notes on Identity, Intolerance and History", in a sharp critique of "Hindutva ideologues", who look at the ancient period of Indian history as "a golden age marked by social harmony, devoid of any religious violence", has said, "Demolition and desecration of rival religious establishments, and the appropriation of their idols, was not uncommon in India before the advent of Islam".

Sections of BSF, BGB personnel 'directly or indirectly' involved in cross border smuggling

By Kirity Roy*  The Border Security Force (BSF) of India and the Border Guard Bangladesh (BGB) of Bangladesh met for 54th Director General level meeting at Dhaka, Bangladesh, on 5th to 9th March, 2024 to discuss on minimizing killings at border area, illegal intrusion, trafficking of drugs and other narcotics, smuggling of arms and ammunitions and other crimes at bordering areas. Further, the summit had an agenda to discuss on overall development in 150 yards area at both sides of the border and design an activity plan for the same.