China fact of the day
…the annual expansion in China’s trade has been larger than India’s total annual trade during last several years.
Here is more, interesting points throughout. And here is the upshot:
The most important factor that still holds back large [Indian] firms from
entering these products is a set of draconian labour laws in India.
Under these laws, it is virtually impossible for a firm with 100 or
more employees to fire the workers even in the face of bankruptcy. It
is equally difficult for the firms to reassign the workers from one
task to another. These provisions impose very low worker productivity
or a high real cost of labour. Large-scale capital-intensive sectors
such as automobiles, where labour costs are a tiny proportion of the
total costs, can profitably operate in such an environment. But the
same is not true of large-scale labour-intensive sectors labour. Few
foreign manufacturers are willing to enter India outside of a small
subset of capital- and skilled-labour intensive sectors.