As prime minister Narendra Modiponders his New Year’s resolutions, one stands out: redoubling India’s efforts to rival China by turning into a global manufacturing hub. Few goals are as important to his country’s future. But few are likely to be as difficult to achieve.
India’s manufacturing frailty is well documented. At just 15 per cent of gross domestic product, the sector is less than half the size of China’s. No poor Asian country has risen to middle-income status with such feeble figures — hence the urgency behind Mr Modi’s “Make in India” drive, launched amid much hoopla in September.
India excels at some high-tech manufacturing. The likes of Ford and Hyundai run world-class local factories, packed with whirring robots. Many global carmakers see India as a crucial export base. But lower skilled, labour-intensive industries such as clothes manufacturing and electronics do less well, causing alarm in a nation that must create 12m new jobs a year until 2030 to meet a looming demographic bulge.