Everyone talks about India being cheaper than China.
When you think about it, Indian may actually be more expensive when looking at the whole picture.
As I have previously shared, modern manufacturing is a very complex process that has hired industrial engineering experts to optimize complex processes to be as efficient as possible. Companies choose China because the entire supply chain and ecosystem can be placed in China and done efficiently at a cost effective price with people who can problem solve as required.
You try the same in India thinking it's cheaper and suddenly you realize all these other costs are adding up. From needing to source via insufficient suppliers, quality callbacks, redtape delays, needing to bribe authorities to get anything done etc. After all this, you suddenly notice your costs are actually quite high and your profits are quite low but it's too late by then.
China has really spoiled companies. They got into China and lucked out because China has a disciplined workforce who are smart enough to do things for a low price. They don't realize this is the exception not the rule and they simply are not gonna get luck on this scale again no matter what they dream.
But ultimately China can't really force them to not pick India. So if they decide to go through with it and it doesn't work out, they should own the responsibility and not push it to someone else.
I would add the one big difference between manufacturing in China and manufacturing in India is the mentality.
In China, the mindset there is always to progress. They always want to do things, better, faster, more cost efficient, and more competitively. If their manufacturing standards are not good enough, then they'll improve themselves to meet the higher standards. And then, they'll move on to exceed those standards. They do it, because they know that it is progress, and that it helps to elevate them to the next level. Competition among the manufacturers are also intense. While the biggest firms in China grabs the largest share of the big manufacturing contracts, they still need an army of sub-suppliers to complete the supply chain. They and the government all work together to deliver competitive manufacturing.
In India, they already think that they have the best manufacturing in the world. In India, it is they who dictate the standards to you, not you dictate it to them. You can only contract your manufacturing to the oligarchs. To the usual suspects like Tata, Reliance, Adani, or Larsen & Toubro. They really couldn't care to manufacture to your standards. As far as they are concerned, they are on par with the best in the world. They'll tell you that this is the standard, and you just have to take it. Take it, or just f**k off, because they'll tell you that India is this great manufacturing Supapowa that all big companies are lining up to come into.
So, let's assume that you're gonna setup a factory in India after all. You've, gone through all the red tapes, bribes, and what not. You go look for Indian suppliers and you can only find a few of them, and all of them, not up to your standards. You ask for improvements, and they say "Yes saar!", and give you the same crap 1-2 months later. You demand more from them, then they spin their words round and round, to make you confused. All of it essentially means: "you just have to accept this". So now you realize that you need to import crucial components from China to make up for the quality. But then there are those excessive Indian tariffs for Chinese imports. So your production costs is gonna exceed that in China. If that isn't enough, those Chinese imports are stopped by Indian customs for arbitrary reasons, and you then need to pay them bribes to release those goods to your factory in India. Delays to you production schedule. Then your factory experiences a black out. Many of your equipment were damaged by the black out, but that's your problem, not India's. You complain, but the Indian authorities will tell you to just accept it, or build your own power plant. Then your factory runs out of water. You complain, but the Indian authorities will tell you to just accept it, or dig up your own ground water. After all that, your workers revolt, complaining that they have not been paid for months. You wondered why, because you have paying regularly to the labour agency who brought you those workers. You tried contacting that agency, but got no reply. They had ran away with all the money, leaving you to deal with your angry and abused workers. Your Indian factory is under-producing, and what ever it produces is not competitive even against ASEAN nations. You are bleeding cash to pay for bribes and scams. On top of that, the Indian government is coming after you with hefty fines and jail time for abusing Indian workers and buying stuff from China. You protest, but the Indian government reminds you who is in charge in India, and it is not you. Now you will truly realize, why India is not the next China.
