DSE Geog Essay 地理例子 | C3: India as the Next Low-cost Manufacturing Hub Replacing China

India

  • Next hub for low-cost manufacturing

  • Next centre for electronics assembly


Strengths (pull factors):

  • Labour - Mixture of low-skilled and high-skilled labour

  • Large base of well-educated university graduates

  • Fluent in English

  • Lower labour cost

  • The hourly labor cost in India for manufacturing averages 92¢, compared with $3.52 in China


Market size

  • Huge potential market (1.2 billion consumers)


Favourable government policies

  • Policy environment --> more supportive of manufacturing - E.g. The Indian government launched the “Make in India” campaign in 2014 --> aims to increase the level of manufacturing in the country

  • India overtook China in 2015 as the country receiving the most foreign direct investment globally and companies have reported improving administrative efficiency at the federal level


Relatively stable political environment


Reliable supply of energy


Challenges:

  • Workers need to be able to at least read and write to operate machinery. India scores low on general skills attainment, ranking 105th in the world according to the UN’s Human Capital Index 2016

  • India’s infrastructure is woeful, in particular transport and energy supply, where it ranks lower than most other emerging economies

  • Government inefficiency is also a major stumbling block – delays in land acquisition and environmental clearances have stalled more than 270 projects across the country


Push factors of China:

  • Rising labour costs

  • Chronic blackouts

  • The Chinese government is encouraging its companies to take the opportunities brought by the “Belt and Road” initiatives, and to invest overseas, a move which also helps absorb excessive industrial capacity back home


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