Why is there a shift of labour-intensive industries from China to South and Southeast Asia? Discuss the advantages and challenges for India in this context. (Answer in 250 words)
Introduction
As China weaponizes its supply chain (tactic of hybrid war), the world is moving towards reshoring based on idea of techna+1. Shift of labour intensive industry:
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Main Body
② Ageing population in China's 1 child policy, older demographic dividend is over
④ Strategic reasons (eg geopolitical)
⑦ Advancement in modern skills in South Asia as China moves to capital industry [Flying geese model]
Advantages for India:
⑦ Cheaper labour in India
⑧ Better infrastructure than South East Asian countries [BODB growth
Advantages for India:
⑦ Cheaper labour in India
⑧ Better infrastructure than South East Asian countries [BODB growth
Challenges/Disadvantages for India:
② Stringent labour laws vs counterparts
③ Productivity adjusted wage rate is lower than Cambodia, Thailand for India [East Asian Tigers] part of RCEP, more part of global supply chain
④ High logistics cost [12-13%] LLEADS India
⑤ Democracy led challenge in India vs dictatorship (no dissent)
Way Forward:
① Upskill skilled modern workforce
② Invest summit (eg Maruti in Mayoral) Plug and play infra, industrial corridor
③ Plug and play infra, industrial corridor
Conclusion
India should seize this moment to be a preferred alternative. Provide all the necessary support for mfg excellence
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Diagram
Fig 1. shows wage differential between China, India, Vietnam, and Thailand
- Comprehensive coverage of reasons for shift
- Multiple factors identified (economic, demographic, geopolitical)
- Clear comparison of wage differentials
- Strong linkage to India's advantages
- Connection to SDG and inclusive growth
- References relevant government schemes
Akansh Dhull
Resource Distribution & Industries
Generic Resource based
Labour-intensive industries shift from China
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Total words
5
Paragraphs
analytical and structured
Tone