India remains competitive in exports - Chart Of The Day 28 August 2014 - Equitymaster

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India remains competitive in exports
Aug 28, 2014

One of the key highlights in the Narendra Modi's Independence Day speech was to invite the world to set up manufacturing units in India. His reasoning was that the country has the skill and talent to become a global manufacturing hub. What further strengthens his point is the costs advantage that India offers. As per a study done by the Boston Consultancy Group, India continues to remain a competitive player in the export market. Comparing costs of various countries - currently and a decade ago - and comparing them to the costs of manufacturing in the US, the study indicates that India's competitiveness has remained intact in the decade gone by. A key factor for the same is the 35% decline in the rupee against the US dollar over this time frame. Further, within the costs, it the labour charges that makes the key difference when compared to other emerging markets.

Well, this point may very well be taken by the government as it supports the goal of India becoming a manufacturing hub. However, the fact of the matter is that along with this, other factors such as improvements in the labour laws, regulatory hurdles and infrastructure will need to be worked upon as well to achieve this goal.

Data Source: Mint

This Chart Of The Day was published in The 5 Minute WrapUp - Is it time to peg the rupee to the US dollar?

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