Global Operations has India Missed the Bus and become a Consumer State?

Until 1750 India was a thriving industrial manufacturing economy, producing 25% of the world’s industrial output. From 2002 to 2012 Indian economy has run a trade deficit every year. It has the largest trade deficit with China which is $31 Billion. China is not amongst the top investing countries in FDI. There are certain forces which accelerate global manufacturing. These are huge factor cost differences, high growth in emerging markets and low transaction cost. India provides excellent opportunities for a global or multinational competitor to operate internationally from this country. Surprisingly China’s bilateral trade with India grew from $0.2 Billion in 1990 to $13.6 Billion in 2004, without much progress in India’s bilateral trade. Despite have a strategic location for sustaining global operations and quality logistics management, it failed. The essential factors which contribute to a decision of a firm to develop its operations considering India as an industrial center are existing in the country like cheap labor, skilled labor, infrastructure facilities and cost. So India lost the chance which was occupied by China. With a complex tax regime global products when launched from India as a manufacturing hub loses its competitive value being costlier than those imported from countries like China, Taiwan and South Korea. The analyzed lacunas have made India becoming a ‘consumer state’ rather than a production house.