Indian Economy: News and Discussion

[karn]

Schemes like ODOP could turn successful. Unfortunately for us there trends work against increasing human employment in manufacturing exports:
1. The west is getting aged and poorer - showing decreasing consumption.
2. More automation is happening in manufacturing as robots and AI are getting better and cheaper.
3. There is this movement to move manufacturing back to the west or near the west like in Mexico or Eastern Europe.

When China grew, none of the above was in practice. Scamgress did not understand that it was once in a lifetime golden opportunity. They missed it like they missed every opportunity to grow India. It shows how bad leadership can destroy a nation’s ability to prosper. The anti national congress by never letting strong oppositions to form doomed the country to bankruptcy. All they had to do was to track the good part of what China did in the late 70s, early 80s - get the literacy rates up, make people skilled in volume industries, start building infrastructure at rapid speeds, and open up to the world. They did nothing and we went to the IMF in 1991 and pawned our gold. Elitist economists and faulty policies screwed us. Yet the stupid congress never changed course. A terrible shame.
But I have to say I am not happy with BJP’s 2nd term. It has been slow. If they can only achieve such limited infrastructure and trade growth despite having a super majority, then what is the use of being the world’s largest party? By now our merchandise exports should be exploding and our major cities getting to Asian class standards. We are so behind. PM Modi needs to refocus back on growth and somehow conclude tricky reforms.

The 1991 reforms were basically an implementation of a report/recommendation written in the late 70s.
And it was carried out only after a gun was put on the head of the govt.
BJPs 2nd term is when we are seeing actual green shoots and pro industrial policies. In the first term all we got was that make in India logo.

 

[RoaringTigerHiddenDragon]

Good positive note by Deloitte:

India’s semiconductor market to reach $55 billion by 2026: Deloitte

A report by Deloitte estimated that the Indian semiconductor market may reach $55 billion by 2026 with more than 60% of the market being driven by three industries

www.thehindu.com

 

[Bharatiya]

Not at all.
Chinese started to raise their workers' salaries from 2010 and all kinds of regulations (i.e environment protection) were introduced since 2008. Before these things, massive investment in other countries' manufacturing is suicide for any company. Your competitors would eat you alive with their super cheap products made in China.
After 2010, people started to think "China+1" strategy. That was the new opportunity coming up for other countries including India. But, comparing to other countries, India wasn't ready.

The problem is opportunities won't always knock on the door. You have to find them or better, create them. For example, Tiktok is a created opportunity. It's a digital product, doesn't need big roads or rails and could've been created in a country like India. In fact, after Tiktok was banned, there were many local versions trying to replace it and mostly failing.

Now I'm not expert in this field but I am pretty sure our techies can cook up an app like Tiktok. It's not google, is it? It's not the lack of knowledge or skills, the lack of business sense and to an extent, lack of funding.

Let's see what Tiktok, this little app easily dismissed is doing economically:

Revenue of (in $ Billion)	Infosys	Tiktok
2019	11.8	0.35
2020	12.78	2.64
2021	13.56	4.69
2022	16.31	12

Infosys is founded in 1981, employs more than 3,30,000 people.
Tiktok is founded in 2016, employs more less than 10,000 people.

There will always be opportunities we can see and take. But sometimes, we have to create. And unfortunately, I cannot really think of anything we did in this scale or even direction. The only silver lining is the Indian stack and UPI—but these are government's achievements, corporates can't claim the merit.

Now, coming to the visible opportunities, the least we can do is prepare for them. It's inevitable that manufacturing in China would become costly and would shift outward. Anyone with some economic foresight could've seen that and prepared. Get the roads, railways, cut down costs and use our biggest advantage—cheap labor. Skill them up. We wasted the opportunity and are now literally scrambling as the factories from China go to Vietnam and even mexico.

Samsung alone has exported $65 Billion from Vietnam—$65 out of $370 exports! 1/6th ffs! India's total merchandise export was $450B in 2022.

What were we doing when Samsung was setting up factories in Vietnam and Vietnam was transforming from a small economy to a significant exporter? Shouldn't the sharks smell blood? If we do not become the sharks and remain the sheep, then we rightfully get eaten, like we're getting exploited now.

Obtaining trade surplus is the only option for boost in forex reserves. In Jan trade deficit fell to 1 billion mainly due to services, Goverment should try to reduce the deficit gap in merchandise to below 10 billion dollars and if done trade surplus will soon be a reality.

While there's panic in reduction of exports, I think GOI is somewhat relieved. Our imports have skyrocketed from China since we're importing all the middle products for manufacturing. Instead of building them here, we're again picking the easy route. The import substitution has to be built as soon and as much as possible.

Once it happens, a good chunk of imports we see will drop. Then with services leading the race this time, we'll become trade surplus. If we do not build import substitution, then our trade deficit might worsen or remain the same for coming years.

It's crucial we win this race.

When will we grow at the magical figure of 8% +, dosent look like we will in this decade. Our golden opportunity was in the 2000s when the international trade was much free and globalised, but with deglobalisation, our growth will most probably hover around 6% at best in this decade. Our bane of manufacturing finally showing its true colors

Forget gdp growth rate, forget $5T, $10T. We'll really grow when we start building critical supply chain and establish factories here instead of importing everything from China and assembling them here.

There are entire companies that just bulk import, do some snitching, labelling and then sell them as Made in India. They'll make a quick buck at the expense of our trade deficit and long-term growth. The Indian customer will buy the cheaper product to save some rupees. It's self-suicide.

We might've missed a golden opportunity, but we should focus on creating one now. The geopolitical situation is extremely favorable for India and it's up to us to exploit it to the fullest. So is the technological frontier. Relatively, Indians have never been more educated compared to their western counterparts—especially in the technical fields. We should build new technologies, companies and go global.

 

[Bharatiya]

Good positive note by Deloitte:

India’s semiconductor market to reach $55 billion by 2026: Deloitte

A report by Deloitte estimated that the Indian semiconductor market may reach $55 billion by 2026 with more than 60% of the market being driven by three industries

www.thehindu.com

There are many such articles forecasting the growth of our market, market and market. Unfortunately, these news don't give much good by themselves.

We're literally the 5th biggest economy, make up 3.4% of global gdp and have the biggest workforce.

But guess what? In Fortune 500, China is #1 with 145 companies, US#2 with 124, Japan #3 with 47. This list is almost same as GDP list in top 5. China, US, Japan, Germany, UK, France. But we aren't even in top 10. Netherlands is #10 with 11 companies. India has 9 companies.

We are a big market but it didn't translate to anything on the ground. When we actually build companies for our and global markets, that's a big positive.

 

[WarmongerLSK]

Good positive note by Deloitte:

India’s semiconductor market to reach $55 billion by 2026: Deloitte

A report by Deloitte estimated that the Indian semiconductor market may reach $55 billion by 2026 with more than 60% of the market being driven by three industries

www.thehindu.com

We are not producing the chips. So, they will be imported right?

 

[RoaringTigerHiddenDragon]

We are not producing the chips. So, they will be imported right?

We do that and we can call ourselves the stupidest country in the world deserving to stay poor. We might as well become slaves to the Choinese. A lot of chips don’t require cutting edge manufacturin. In fact I read somewhere that 60-75 nm chip categories are the largest. We can easily manufacture this. The issue is capital investments and entrepreneurs who can scale such companies.

 

[Haldilal]

Ya'll Nibbiars

 

[Tejbrahmastra]

The problem is opportunities won't always knock on the door. You have to find them or better, create them. For example, Tiktok is a created opportunity. It's a digital product, doesn't need big roads or rails and could've been created in a country like India. In fact, after Tiktok was banned, there were many local versions trying to replace it and mostly failing.

Now I'm not expert in this field but I am pretty sure our techies can cook up an app like Tiktok. It's not google, is it? It's not the lack of knowledge or skills, the lack of business sense and to an extent, lack of funding.

Let's see what Tiktok, this little app easily dismissed is doing economically:

Revenue of (in $ Billion)	Infosys	Tiktok
2019	11.8	0.35
2020	12.78	2.64
2021	13.56	4.69
2022	16.31	12

Infosys is founded in 1981, employs more than 3,30,000 people.
Tiktok is founded in 2016, employs more less than 10,000 people.

There will always be opportunities we can see and take. But sometimes, we have to create. And unfortunately, I cannot really think of anything we did in this scale or even direction. The only silver lining is the Indian stack and UPI—but these are government's achievements, corporates can't claim the merit.

Now, coming to the visible opportunities, the least we can do is prepare for them. It's inevitable that manufacturing in China would become costly and would shift outward. Anyone with some economic foresight could've seen that and prepared. Get the roads, railways, cut down costs and use our biggest advantage—cheap labor. Skill them up. We wasted the opportunity and are now literally scrambling as the factories from China go to Vietnam and even mexico.

Samsung alone has exported $65 Billion from Vietnam—$65 out of $370 exports! 1/6th ffs! India's total merchandise export was $450B in 2022.

What were we doing when Samsung was setting up factories in Vietnam and Vietnam was transforming from a small economy to a significant exporter? Shouldn't the sharks smell blood? If we do not become the sharks and remain the sheep, then we rightfully get eaten, like we're getting exploited now.



While there's panic in reduction of exports, I think GOI is somewhat relieved. Our imports have skyrocketed from China since we're importing all the middle products for manufacturing. Instead of building them here, we're again picking the easy route. The import substitution has to be built as soon and as much as possible.

Once it happens, a good chunk of imports we see will drop. Then with services leading the race this time, we'll become trade surplus. If we do not build import substitution, then our trade deficit might worsen or remain the same for coming years.

It's crucial we win this race.



Forget gdp growth rate, forget $5T, $10T. We'll really grow when we start building critical supply chain and establish factories here instead of importing everything from China and assembling them here.

There are entire companies that just bulk import, do some snitching, labelling and then sell them as Made in India. They'll make a quick buck at the expense of our trade deficit and long-term growth. The Indian customer will buy the cheaper product to save some rupees. It's self-suicide.

We might've missed a golden opportunity, but we should focus on creating one now. The geopolitical situation is extremely favorable for India and it's up to us to exploit it to the fullest. So is the technological frontier. Relatively, Indians have never been more educated compared to their western counterparts—especially in the technical fields. We should build new technologies, companies and go global.

The problem is opportunities won't always knock on the door. You have to find them or better, create them. For example, Tiktok is a created opportunity. It's a digital product, doesn't need big roads or rails and could've been created in a country like India. In fact, after Tiktok was banned, there were many local versions trying to replace it and mostly failing.

Now I'm not expert in this field but I am pretty sure our techies can cook up an app like Tiktok. It's not google, is it? It's not the lack of knowledge or skills, the lack of business sense and to an extent, lack of funding.

Let's see what Tiktok, this little app easily dismissed is doing economically:

Revenue of (in $ Billion)	Infosys	Tiktok
2019	11.8	0.35
2020	12.78	2.64
2021	13.56	4.69
2022	16.31	12

Infosys is founded in 1981, employs more than 3,30,000 people.
Tiktok is founded in 2016, employs more less than 10,000 people.

There will always be opportunities we can see and take. But sometimes, we have to create. And unfortunately, I cannot really think of anything we did in this scale or even direction. The only silver lining is the Indian stack and UPI—but these are government's achievements, corporates can't claim the merit.

Now, coming to the visible opportunities, the least we can do is prepare for them. It's inevitable that manufacturing in China would become costly and would shift outward. Anyone with some economic foresight could've seen that and prepared. Get the roads, railways, cut down costs and use our biggest advantage—cheap labor. Skill them up. We wasted the opportunity and are now literally scrambling as the factories from China go to Vietnam and even mexico.

Samsung alone has exported $65 Billion from Vietnam—$65 out of $370 exports! 1/6th ffs! India's total merchandise export was $450B in 2022.

What were we doing when Samsung was setting up factories in Vietnam and Vietnam was transforming from a small economy to a significant exporter? Shouldn't the sharks smell blood? If we do not become the sharks and remain the sheep, then we rightfully get eaten, like we're getting exploited now.



While there's panic in reduction of exports, I think GOI is somewhat relieved. Our imports have skyrocketed from China since we're importing all the middle products for manufacturing. Instead of building them here, we're again picking the easy route. The import substitution has to be built as soon and as much as possible.

Once it happens, a good chunk of imports we see will drop. Then with services leading the race this time, we'll become trade surplus. If we do not build import substitution, then our trade deficit might worsen or remain the same for coming years.

It's crucial we win this race.



Forget gdp growth rate, forget $5T, $10T. We'll really grow when we start building critical supply chain and establish factories here instead of importing everything from China and assembling them here.

There are entire companies that just bulk import, do some snitching, labelling and then sell them as Made in India. They'll make a quick buck at the expense of our trade deficit and long-term growth. The Indian customer will buy the cheaper product to save some rupees. It's self-suicide.

We might've missed a golden opportunity, but we should focus on creating one now. The geopolitical situation is extremely favorable for India and it's up to us to exploit it to the fullest. So is the technological frontier. Relatively, Indians have never been more educated compared to their western counterparts—especially in the technical fields. We should build new technologies, companies and go global.

Just don't understand why cant we manufacture low end goods that we import from china. Bihar UP has such large youth population who would be willing to work at very low cost. But government is only focusing on high end manufacturing , which ignoring the ones where we can really excel. We should be following Bangladesh type model for low end manufacturing by pushing the likes of UP, Bihar youths in factories. This will bring in employment, wealth to these poor states as well as massively reduce import and even maybe increase in export

 

[karn]

Just don't understand why cant we manufacture low end goods that we import from china. Bihar UP has such large youth population who would be willing to work at very low cost. But government is only focusing on high end manufacturing , which ignoring the ones where we can really excel. We should be following Bangladesh type model for low end manufacturing by pushing the likes of UP, Bihar youths in factories. This will bring in employment, wealth to these poor states as well as massively reduce import and even maybe increase in export

All low end goods cannot come under one umbrella. Please be more specific.

 

[Knowitall]

All low end goods cannot come under one umbrella. Please be more specific.

I for one would advocate for starting with textile parks as they are one of the least technology oriented mass factories in the world today.

There was some news about UP alloting some land under PM Mitra scheme for textile parks but no update on that yet.

Textile parks
Furniture
Simple electric appliances
Farming

The issue is that each of these sectors are dominated by some other country at the moment.

Ideally India should have replicated both the Japanese and the Chinese in the electric appliance market by flooding the world with cheap but effective products but we simply lack the industry to sustain it which in turn hides behind high govt tariffs to protect themselves from foreign companies.

In farming despite having one of the most fertile basins on the planet we are forced to stay out trade agreements because tiny islands like new zealand best us in the global markets but who gives a shit if you can just protest on the street while leaching of tax payers money portraying yourself as desh ka kisan.

Ideally all these sectors should be witnessing a high amount of penetration from our side but anything like that is yet to happen.

 

[Cheepek]

 

[angryIndian]

You are looking at it the other way. IT didn't cause harm to manufacturing, IT succeeded because babus were too incompetent and slow to choke the IT sector with over regulation and because IT doesn't need that much physical infra as manufacturing.

True, The IT sector didn't harm the manufacturing industry but since its advent in the 90s, the government completely ignored all other sectors leading to either their demise or stagnation.
I saw so many manufacturing industries getting shut down and millions of people lost their jobs, the government never bother to save them. We gradually became a heavily import-dependent country,so much so that until a few years ago we used to import rudimentary things like steel rods and pipes, Diwali crackers and lights from China.

The government only had an epiphany regarding manufacturing after the Galwan clash when too much water had flown and the share of manufacturing had fallen to a historic low of 13% and the trade imbalance to a historic high.

As for IT industry in India, unfortunately for all its might is virtually a Potemkin industry as it has little or no impact on the society, at least not the way manufacturing did to China.
The manufacturing industry single-handedly turned China from a poor country to now almost a developed country where as India's status as a poor impoverished country has remained intact even after 30 years of economic liberlization.The primary participant and beneficiaries of this industry are the same 1-2% of the already well-off sections of society.

 

[Abdus Salem killed]

Ericsson has increased India investments to manufacture 5G gear: MD

The Swedish giant has increased investments in India to manufacture 5G radio equipment as it looks to help Indian telcos deploy networks.

m.economictimes.com

 

[Crazywithmath]

What is up with all these long ass rants on the success story of IT and ITes in India? The very reason of all the aspirations of today's India is due to success of services. The very reason India is not a bangladesh or pakistan is because we had services. Simping over china is meaningless; for they did not start opening their market in freaking 1991.

I saw so many manufacturing industries getting shut down and millions of people lost their jobs, the government never bother to save them.

Because they could not save them; simple. Theis is what happens when economy is thrown open before undertaking structural reforms; inefficient industries get wrecked.

The government only had an epiphany regarding manufacturing after the Galwan clash when too much water had flown

India's overall exports have been recording quite healthy growth despite adverse global headwinds for two consecutive years now. And it is prohected to maintain that momentum. Only yesterday news came out that Apple had created 100000 direct jobs in India; which is expected to more than triple in the next few years. All these just because on one fine morning after Galwan happened a babu woke up and chose violence; okay got it!

the share of manufacturing had fallen to a historic low of 13% and the trade imbalance to a historic high.

It is 15% (and not 13%) rn; also trade imbalance will only increase more as the exports grow. You go top down as the capacity gets built; no one can start manufacturing stuff from scratch and all of a sudden starts exporting xyz trillions worth.

China from a poor country to now almost a developed country where as India's status as a poor impoverished country has remained intact even after 30 years of economic liberlization.

Eh? You live in a cave or what? We are very close to eliminating extreme poverty.

Anyway just leave it; you won't stop writing rants anyway. I think enough pieces of news have been shared on this thread on India's poverty reduction.

The primary participant and beneficiaries of this industry are the same 1-2% of the already well-off sections of society.

You mean to say wealth creation does not help improve the lives of people at the bottom of the pyramid? Citation needed for that.

N.B. --> This figure is inconsistent with IT return data due to obvious reasons.

 

[karn]

As for IT industry in India, unfortunately for all its might is virtually a Potemkin industry as it has little or no impact on the society, at least not the way manufacturing did to China.
The manufacturing industry single-handedly turned China from a poor country to now almost a developed country where as India's status as a poor impoverished country has remained intact even after 30 years of economic liberlization.The primary participant and beneficiaries of this industry are the same 1-2% of the already well-off sections of society.

You impression of the IT industry seems to be stuck in 2004. Indian IT is about as Potemkin as chinese manufacturing.
As for your "impact on society". Yeah lets shit on the the largest entry into the upper middle class in this country and among the largest income tax paying group .. They should all be writing govt exams and call themselves "aspirants" instead of just unemployed or they should just leave the country. Lets also take away all the service industries that are only possible because of the large spending power of the afore mentioned group.
And just FYI services is 54% of Chinese GDP .. Manufacturing hardly "single handedly" turned China from a poor country to now almost a developed country

 

[Shuturmurg]

You impression of the IT industry seems to be stuck in 2004. Indian IT is about as Potemkin as chinese manufacturing.
As for your "impact on society". Yeah lets shit on the the largest entry into the upper middle class in this country and among the largest income tax paying group .. They should all be writing govt exams and call themselves "aspirants" instead of just unemployed or they should just leave the country. Lets also take away all the service industries that are only possible because of the large spending power of the afore mentioned group.
And just FYI services is 54% of Chinese GDP .. Manufacturing hardly "single handedly" turned China from a poor country to now almost a developed country

That is now, at india's level of development China had 32% of GDP from manufacturing.

World Bank Open Data

Free and open access to global development data

data.worldbank.org

 

[karn]

That is now, at india's level of development China had 32% of GDP from manufacturing.

World Bank Open Data

Free and open access to global development data

data.worldbank.org

Difference in the share of services as % of GDP between India and China post 1991 is not significant.
We know that we suck at manufacturing .. The point is this crab attitude is weird. Our services industry arn't too large they are infact just the correct size.

Services, value added (% of GDP) - China, India | Data

Services, value added (% of GDP) - China, India from The World Bank: Data

data.worldbank.org

 

[FalconSlayers]

True, The IT sector didn't harm the manufacturing industry but since its advent in the 90s, the government completely ignored all other sectors leading to either their demise or stagnation.
I saw so many manufacturing industries getting shut down and millions of people lost their jobs, the government never bother to save them. We gradually became a heavily import-dependent country,so much so that until a few years ago we used to import rudimentary things like steel rods and pipes, Diwali crackers and lights from China.

The government only had an epiphany regarding manufacturing after the Galwan clash when too much water had flown and the share of manufacturing had fallen to a historic low of 13% and the trade imbalance to a historic high.

As for IT industry in India, unfortunately for all its might is virtually a Potemkin industry as it has little or no impact on the society, at least not the way manufacturing did to China.
The manufacturing industry single-handedly turned China from a poor country to now almost a developed country where as India's status as a poor impoverished country has remained intact even after 30 years of economic liberlization.The primary participant and beneficiaries of this industry are the same 1-2% of the already well-off sections of society.

What kind of rubbish is this? Government never focussed on manufacturing because of call centre boom? Scamgressis were more interested in freebies than providing manufacturing jobs. And "xyz million factories shutdown and billions getting unemployed" is just a fairy tail, if you're gonna say that Ford shutting down its India plant for example impacted India in anyway then thats the most incorrect assessment. Other players filled the gap, and TATA took over that plant.

And you think IT had very little impact on our society? Like how? This sector is alone responsible for making us what we are today else we would've been as worse as Afghanistan without it.

Yes China is no longer a poor country and India is a poor country, it isn't as worse as other countries in same per capita income group. In other countries with $2.5k to $3k per capita income, you won't find anything that resembles anything like the 1st world, India somehow doesn't fit into the bracket of those countries. India's economy is rock solid if not for current account deficit ruining the exchange rate.

LoL, if I earn ₹50 lakh per annum, its not that i won't be spending that money on taxis, electricity bills, restaurants, saloons, hotels, public transit etc. If a city of 100k gets 1000 new jobs which give ₹10 LPA income, its enough to transform the lives of others in the city, thats a fact. Even in small cities IT sector has penetrated, you see videos of some Tier-2 and Tier-3 cities like Vadodara, Bhubaneshwar, Mohali, Coimbatore, Trichy etc for example you'll find many MNCs having their offices there, thats enough of a good news for restaurant owners, taxi drivers, real estate developers, barbers and so on and so forth.


India sucks at large scale manufacturing its true, but your rants are too stupid to be even taken seriously.

 

[thebakofbakchod]

The fact that an $18 trillion economy is growing just 1% or so slower than a $3 trillion one should have sparked some alarm bells in the government, but people are still too busy chestthumping about being the fashtesht growing economy.

At 6.1%, India to be fastest-growing economy, projects IMF; China at 5.2%

India remains the fastest-growing economy in the world with the current estimates surpassing overall growth in emerging and developing Asia.

www.hindustantimes.com

India's GDP may grow by only 5-6% for next few years: Motilal Oswal's Nikhil Gupta

According to the economist, the Reserve Bank of India could also raise the repo rate again in April following the unexpectedly large increase in inflation in January

www.moneycontrol.com

 

[Tejbrahmastra]

What kind of rubbish is this? Government never focussed on manufacturing because of call centre boom? Scamgressis were more interested in freebies than providing manufacturing jobs. And "xyz million factories shutdown and billions getting unemployed" is just a fairy tail, if you're gonna say that Ford shutting down its India plant for example impacted India in anyway then thats the most incorrect assessment. Other players filled the gap, and TATA took over that plant.

And you think IT had very little impact on our society? Like how? This sector is alone responsible for making us what we are today else we would've been as worse as Afghanistan without it.

Yes China is no longer a poor country and India is a poor country, it isn't as worse as other countries in same per capita income group. In other countries with $2.5k to $3k per capita income, you won't find anything that resembles anything like the 1st world, India somehow doesn't fit into the bracket of those countries. India's economy is rock solid if not for current account deficit ruining the exchange rate.

LoL, if I earn ₹50 lakh per annum, its not that i won't be spending that money on taxis, electricity bills, restaurants, saloons, hotels, public transit etc. If a city of 100k gets 1000 new jobs which give ₹10 LPA income, its enough to transform the lives of others in the city, thats a fact. Even in small cities IT sector has penetrated, you see videos of some Tier-2 and Tier-3 cities like Vadodara, Bhubaneshwar, Mohali, Coimbatore, Trichy etc for example you'll find many MNCs having their offices there, thats enough of a good news for restaurant owners, taxi drivers, real estate developers, barbers and so on and so forth.


India sucks at large scale manufacturing its true, but your rants are too stupid to be even taken seriously.

One thing that It or large dependence on service sector has cause that it has somehow pushed India into a kind of middle income trap without being even a middle income country!! we have become quite strong in services while equally weak in manufacturing, which give a distorted perception of Indian wealth!