INDIA: an emerging ground for work

India was a closed economy till many years even after independence and did not allow other countries to carry out operations within the country to protect our own interest. There were companies operating with lots of government rules and regulations. After the 1991 policy of LPG (Liberalisation, Privatisation and Globalisation), India opened its doors for other countries to operate with more flexibility and independence and less government control.

India has remained a hot-spot for most of the global companies due to its low cost labour with good brains. Another reason was that the country itself has huge potential to demand various products due to its vast population. It attracted many companies to start their units within the country and operate on a large scale. It also attracted because of its geographic location as it was easy to satisfy the demand generated in the east through India. There was easy availability of resources like land, labour, raw materials, etc which made it more promising for the companies to start their operations.

Later China began to capture the market by further low wage rates for the labours, availability of large number of labours both skilled and unskilled, huge population, availability of resources, etc. Companies started setting their units in China because of further cost advantages. This became a challenge in front of India.
Current situations in China pose a different picture for its own labour market as well as for India. The government of China has thought to increase the minimum wage rate for all the labours to increase the internal consumption of the country. This move taken by the government has led to problems for various companies which were operating in China for cost advantages. The increase in the cost will remove their advantages around the world and will no longer make them competitive. The labours also started striking in their companies which has led to halts in the production schedules and huge losses, but this move forced the companies to raise the wages of the employees working in their company. Some companies also started raising the wages in order to attract good employees from other companies. The sudden move has disturbed most of the operations of many multinational companies which has made them re-think about their operating locations. The most affected companies into the highlights are Foxconn Technologies and Honda Motors who are under huge pressure of increasing wages to retain their employees and continue their operations in the country. The situation has made them to re-think about their style of running operations and managing the employees.

“Opportunity remains opportunity only if it is grabbed at the right time”

There is a huge opportunity in front of India as the next best option for the companies to move their operations seems to be India with all the promising features. Here, the government can take a move to attract the companies by incentivising them and help our country to progress rapidly. Any step taken at this movement will make our country more attractive and attract huge inflows in the form of various green-field operations as well as export earnings by exporting from these companies. This can also help to achieve our 2020 vision to be on the top in the global charts in terms of everything.
Here, the government of India should take a right step in order to be more attractive for various companies to relocate their operations from China to India.