We rely on on both Chinese and western goods that are made in China. That's why the trade deficit is so high. It would have been very different if the western companies made their stuff in their own country instead.
Eventually many of those goods will be made in India. Even Chinese companies have started making in India. For example, smartphone companies.
http://gadgets.ndtv.com/mobiles/new...s-set-up-in-india-in-last-year-prasad-1451588
Right now, manufacturing is making a transition, shifting from other countries into India. So that trade deficit is a temporary phenomenon, probably will end well before 2025. Oil prices are slowly set to erode to very low levels by then. Even if we don't export, imports will reduce.
You need to realize that manufacturing something is not just building a factory. It is logistics, supply chain, skilled manpower and also infrastructure. You may set up a cell phone factory in India, but there are no clusters there to support you. You end up producing a product costing twice because you need to import most of the core components. This is reality in India, it took China 30 years to build up the supply chain clusters. When you see a Toshiba or Sony, you fail to see the army of small Chinese OEMs supplying the components to them.
Indian wages are already 3 x cheaper. Yet Chinese and Western manufacturers choose places like Indonesia, Bangladesh and Vietnam to outsource lower end products. The reason is the bureaucratic red tape in India. Your own beloved GOI's incompetence is screwing up your country.
Most of the high end stuff we buy from China is very less. Most of our imports are low-tech, like consumer electronics, easily sourced from elsewhere, particularly within the country.
Low end electronics? You think we only sell you plastic fan? You obviously haven't been to Shenzhen. All your television, computers, cellphones, washing machine, air conditioners contains thousand of Chinese components. The technology to produce the LCD screen is one of the most sophisticated technologies on earth, only Korea, Taiwan, Japan and China has it. The technology to make computer semiconductors are also dominated by the same 4 North East Asian countries.
If you could do it, you would've done it already. Easier said than done.
So you simply stick tariffs on imported electronics and give tax sops for domestic production, as is happening in the smartphone industry. But we can't do that to oil or gold.
Ever wonder why you didn't do it?
This shows what I said. China is led by investment and has less consumption.
China's just built infrastructure. The article I posted says the same.
You were saying it was only led by investments, you fail to see a consumer base 4x larger than India. Use some common sense, if it was that simple as building infrastructure without the infrastructure giving a return, how does China sustain the cost to build the infrastructure? You think we just build roads? There sewage treatment plants, schools, dams, housing, wind turbines, solar parks. These infrastructure will defined China for the next 50 years.
That's how it works though. Even outsourcing companies have their own IP, something that the client does not, like in-house software.
Apple is a bad example because they own the IP to their entire phone. What the manufacturers own is the manufacturing IP. So if Foxconn ever messes up, Apple can withdraw their entire business with Foxconn and transfer it to someone else like Pegatron. Pegatron may have their own way of doing things because of their IP which might be superior to what Foxconn has. so they are their own competitors. But neither Foxconn nor Pegatron have any control over the iPhone. As far as the consumer is concerned, only Apple is responsible for the iPhone.
That is not IP, that's BRANDING. Apple owns the branding for the entire phone but IP to certain technological features of the phone. All other suppliers own IP on their respective components/processes.
Indians don't see one country as a role model. You can say you will find industry specific role models.
The American Silicon Valley is a role model when it comes to IT. France's defence industry is a role model. There's UK's financial sector. Japan and South Korea's electronics industry.
So on.
But India will find its own way.
Hope you find your own way soon, the timebomb is ticking. It's a matter of time those slum dogs get smarter and start to demand more.
