Indian manufacturing’s share of GDP has been stagnating. Some of the industry’s problems stem from a business culture of hierarchy and bureaucracy. But competitive pressure is forcing a transformation, and the new management models now being adopted can change how investors and customers perceive Indian companies
By George Wyeth
As China turned itself into the manufacturing centre of the world over the past decade, many expected India to follow – but it never happened. The Indian economy did take off, but largely in services such as software development. For years, manufacturing’s share of GDP has been flat at 15-16%, and has actually declined slightly in recent years. Now, with the economy in trouble, manufacturing output is stagnating.
Many of the factors usually blamed for this are beyond the manufacturers’ control. Infrastructure is still weak. Financing is difficult to get, with high inflation driving up interest rates and bankers becoming risk averse. Labour laws make it extremely difficult to lay off employees; this discourages investment by global businesses, which are able to locate elsewhere. Energy is expensive and unreliable. Continue reading
In the face of a severe economic slowdown and an impending balance-of-payment crisis, the Indian business community has a clear opportunity to pull the country out of the current crisis. However, this can only achieved if the apex chambers of commerce restructure themselves
By Rajiv Kumar and Karan Pradhan
Oct. 21 – Just three years ago, India was viewed as another Asian upcoming economic giant, along with China. Now, instead, the country is in a severe economic slowdown with a potential balance-of-payment crisis. A plummeting rupee and declining foreign exchange reserves have led some experts to compare it with India’s 1991 crisis with its subsequent IMF bailout.
Certainly New Delhi’s economic mismanagement is largely to blame. But so is the Indian business community. In the last few years, it has abdicated the role it has historically played in providing the government with an independent opinion and pushing for the critical reforms required. Continue reading
In a nation of avid tea drinkers, coffee continues to gain ground.
By Nathan Barlow
Oct. 10 – Coffee first made its initial appearance in China when a French missionary in the 1890s planted beans throughout Yunnan Province. Over the next hundred years, coffee would go largely unnoticed but, as is the case with many things in China, the market has changed quite a bit over the last 20 years.
This is part one of a three-part series detailing various facets of China’s coffee industry. Part two, dealing with coffee trade in China, and part three, dealing with domestic production, will be posted in the coming days. Continue reading
Sept. 17 – Japan will extend an Official Development Assistance (ODA) loan to Vietnam this year worth US$500 million, according to Japan’s Foreign Minister Fumio Kishida. The announcement was made this week during the fifth meeting of the Vietnam-Japan Cooperation Committee, a forum for bilateral cooperation chaired by the foreign ministers of both countries.
The US$500 million ODA loan has been earmarked for infrastructure and educational projects in Vietnam as a key component of the Joint Vietnam-Japan Initiative. The initiative, established in 2003, brings together both public and private sector leaders in an effort to strengthen Vietnam’s investment environment.
The Joint Vietnam-Japan Initiative utilizes the public-private partnership (PPP) model to provide support to Vietnam’s service and retail industries as well as funding for infrastructure projects. It also seeks to address macroeconomic concerns affecting Vietnam, such as inflation control and exchange rate stabilization. Continue reading
By David Anthony Matthew
Sept. 9 – Named as one of Bloomberg Markets’ fifty most influential people in its upcoming October issue, Raghuram Rajan has been much more than a mere professor of economics over the course of the past decade. One part public intellectual, one part policymaker and perhaps the most famous Cassandra of the global financial crisis, he is widely considered to be among the world’s preeminent thinkers on economic matters. Yet few would envy Rajan today as he steps into the middle of his country’s growing financial maelstrom as governor of the Reserve Bank of India.
While nearly all emerging markets have suffered from capital flight in anticipation of the American Federal Reserve’s return to tighter monetary policy — including the winding down of its quantitative easing program — India has been especially hard hit. Its economy is suffering from multiple woes: a rupee diminishing in value every week and mired in inflation, uncontrolled budget deficits and subsidy programs and the world’s second largest current account deficit. Continue reading
Posted in Business
Tagged India, RBI, Reform
Sept. 5 – In a stroke of fortunate luck, despite the devaluing rupee, Indian tea exporters have benefited recently thanks to tea producers lowering their prices which has in turn made them much more competitive globally.
The decrease in the value of the rupee has actually come at a somewhat opportune time for Indian growers since Kenya (a major competitor to India) recently had a bumper crop and was able to lower its prices to a level that India would have previously struggled to compete with. As a result, many of India’s largest tea producers, such as McLeod Russel, Joonktollee Tea & Industries and the Goodricke Group are forecasting a 10-20 percent increase in global tea exports. Continue reading
Posted in Business
Tagged Export, India, Tea
Aug. 30 – City states might seem a thing of the past. Athens, Danzig, Venice — all became part of nation states. Except for Monaco and the Vatican in Rome, the only true city state remaining is Singapore although Hong Kong and Macau enjoy a high degree of autonomy within China. But as cities rise and become global cities, could the city state make a comeback?
In the West, high profile mayors make the case for increasing cities’ autonomy. Consider London’s Boris Johnson and New York’s Michael Bloomberg. Both are larger than life figures who are able to enact policies and regulations that affect millions under their administration. Indeed, there was talk of letting London become a city state not so long ago. Continue reading
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