Indian Economy News & Discussion - Nov 27 2017

Kaivalya · Post by **Kaivalya** » 03 Dec 2019 20:19

Rishirishiji,

As much I hear your pain about the human condition of the labor camps in hangzhou - this is how long it took the IT industry(20+ years) from being dumb bpo/call center/y2k programmers to create some eco system for startups because it takes all kinds of things to innovate. This article takes a silicon valley view/fintech view. We have other industries like pharma where we have scaled up the innovation curve....but we are behind in a lot of other industries where we need to start from the low end of the curve and accelerate as best as we can.

https://yourstory.com/2019/12/indian-st ... alley-bank

disha · Post by **disha** » 03 Dec 2019 21:58

^Innovation just does not happen in vacuum. For that the eco system to handle risk needs to be there as well. Look at Maharashtra itself, the CM is mucking around with large infrastructure projects on a whim. Now boil it down to a situation where an individual entrepreneur is trying to come up with a product and a delayed payment on a loan or even a loss takes him out of business for life.

Remember, today's HP/Apple were literally started in garage. Tesla did not come about just like magic. What is the risk appetite of Indian businesses, including individual entrepreneurs to do innovation? Even pakoda sellers get mocked. The entire socialist outlook of past 65 years cannot be un-baggaged easily.

Think about this innovation: https://swarajyamag.com/insta/indian-ar ... ss-shampoo

All of personal hygiene companies should license it from above entrepreneur (and not tell it to bakis).

Rishirishi · Post by **Rishirishi** » 04 Dec 2019 04:06

Please ask the mass manufacturing dude in a sweatshop in Shenzhen what the alternatives were?
Fact - many of these folks save up, go back home, start something. In India, we are too dependent on the services job to do that.
Second, we are not even talking of rock bottom prices to compete internationally. We are talking of supplanting imports which after duties etc are not so cheap, but still take our market because we have nothing similar. That's the point. The domestic Indian market is itself huge

Dudes, I am not against companies who want to set up mass manufacturing. By all means, why not?
All I wan't to say is that it may not be the steppingstone poeple think. India may actually be past that stage already. Next stage has to be infrastructure and law&order.
Even If India set up a huge Industrial mass manufacturing export machine, like canton, it will not move forward before the core and fundamental problems are adressed.

They key to increasing the Per capita income, is to make each and every individual more productive. China realized this, and ivested like mad in infrastructure. Happy to see the signs from the current governments to spend 100 lack crores in Infrastructure. That should adress the roads, ports and water systems. The legal system will also have to be adressed.

https://www.reuters.com/article/us-indi ... SKBN1Y50TN

Rahulsidhu · Post by **Rahulsidhu** » 04 Dec 2019 08:35

https://www.moneycontrol.com/news/busin ... 76411.html

Biggest constraint to doing business in the country is poor contract enforcement, and the blame for the same rests mostly with the government, a top finance ministry official said on November 26.

The government delays payments or does not deliver on promises made earlier, posing challenges to businesses, principal economic advisor to the finance minister Sanjeev Sanyal said.

I agree with this, and find it interesting that this is coming from a top advisor to the govt.

As I've argued before on this forum, the govt approach of starting from a target fiscal deficit number and managing payments and spending based on it is completely backwards. Spending/taxation policy should be the input, and fiscal deficit, whatever it works out to be, should be the outcome.

Recently it has been reported that state govts. are not getting paid by the central govt on time (again, managing to the fisc. deficit target) and thus are unable to spend themselves. This is insanity. The above quote gives me hope that at least there are some people within the govt. who may be arguing against such an approach.

Karan M · Post by **Karan M** » 04 Dec 2019 09:04

Rishirishi wrote:
Please ask the mass manufacturing dude in a sweatshop in Shenzhen what the alternatives were?
Fact - many of these folks save up, go back home, start something. In India, we are too dependent on the services job to do that.
Second, we are not even talking of rock bottom prices to compete internationally. We are talking of supplanting imports which after duties etc are not so cheap, but still take our market because we have nothing similar. That's the point. The domestic Indian market is itself huge
Dudes, I am not against companies who want to set up mass manufacturing. By all means, why not?
All I wan't to say is that it may not be the steppingstone poeple think. India may actually be past that stage already. Next stage has to be infrastructure and law&order.
Even If India set up a huge Industrial mass manufacturing export machine, like canton, it will not move forward before the core and fundamental problems are adressed.

They key to increasing the Per capita income, is to make each and every individual more productive. China realized this, and ivested like mad in infrastructure. Happy to see the signs from the current governments to spend 100 lack crores in Infrastructure. That should adress the roads, ports and water systems. The legal system will also have to be adressed.

https://www.reuters.com/article/us-indi ... SKBN1Y50TN

Again, I don't understand why you can't seem to get this basic point. We have nothing in comparison right now. Zip, nada, zilch. In areas where the PRC is dominating us and dumping goods on us. Inefficient, mass manufacturing or whatever you wish to call it, will automatically serve to provide employment and goods, services to at least a fraction of the country which chooses those items over cheap, or more expensive, or higher quality imports. I want a baggage lock - my options, poorly made small locks from India, posh looking PRC ones (which are likely bad metallurgically, but work ok) or an expensive Samsonite TSA one. Guess which is selling the most.

Think of it this way. Its well known the tip of a ball point with the ball in it, involves a lot of secret sauce, metallurgy, precision manufacturing. Yet, does making the rest of the pen in India, including molding the plastic, the remaining portion of the refill etc not provide employment?
Or would you rather import your entire pen from abroad?

Now consider. The pen is sold for Rs 10. The tip is Rs 4, imported. I am deliberately skewing the numbers against the manufacturer. The rest of it costs you Rs 5, including labor. You make merely 1 Rs, i.e. 10% margin on the pen, and after distribution etc you are left with 5% margin per pen.
But guess what, that Rs 10 pen is cheaper than the Rs 30 posh import, and if the GOI has sense, the Rs 15 Chinese import because we imposed anti-dumping measures. And if you play your cards right, you sell that pen across the whole of India. You have 50 million customers out of a population of 1.4 Billion. That's a net profit of Rs 12.5 Crores. There are going to be multiple such firms all across India because the transportation and other marketing costs dont make it profitable for you to serve the whole of India. One in Punjab. One in Odisha, one in MP, one in Maharashtra.. point is they provide employment and are profitable. And once they accumulate a decent cash reserve, they can actually go abroad and buy that over expensive tip manufacturing plant and move it to India. Or sponsor a CSIR project which develops the technology in India. The scale of the Indian population for *basic* goods is mind-boggling and will allow them to scale and compete with more powerful firms which are merely sitting at the edge of the value chain. How is this hard to get? We are not talking of over capacity to cater to the whole world as the PRC has done, but merely meeting our needs first.

The capacity surge though is exactly what China has done. Think on these lines instead of wondering/philosophizing/being concerned that about 20 years from now, the game will be about increasing productivity. Fact is all those concerns come much much later. Think about being the next Mont Blanc or even a Lamy or whatever, once you at least cross the hurdle of making Bics for your populace. By offering people a profitable alternative to farming, you will move them away from it. Once that occurs, corporations can move in and start centralizing the land reserves and trying to achieve the productivity levels, western farmers are going for.

Right now, we in India are stuck with navel gazing. Over centralized GOI bureaucracy which often sits and thinks of new ways to tax, or stop entrepreneurship. Raghuram Rajan's gyan about manufacturing was a case in point. Here we have a country which has not even moved to meet its own needs, and this dude was busy giving gyan to GOI about MII and its policy. What a pompous, preposterous idiot he was. He could not manage his own department, throttled Indian industry according to multiple accounts by constantly advising against dropping rates when there was a liquidity crisis and then started to dabble in policies which were beyond him.

Which is why I am saying, lets stop this navel gazing about productivity gains and what not and let entrepreneurs decide, and give them a fair ground to fight in, by restricting imports, on case by case basis, from countries which have already climbed that hill and try to dump on us.

Dileep · Post by **Dileep** » 04 Dec 2019 10:15

We had "restricted imports" for a long time. We ended up having 1950s products continue in 1980s. Friggin razor blades were being smuggled then. Industry will doze comfortably behind the trade barriers onlee.

What we really need is to mitigate the weaknesses, making sure that those actions alone will never be enough to be complacent. The industry should still be required to run fast to keep their position.

Not a precise example, but if your kid is bullied while playing outside, the solution is not to buy him indoor toys so that he don't have to go out to play, or go out and fight for him. The solution is to teach him Karate and feed him healthy food, so that he can take care of the bullies himself.

Karan M · Post by **Karan M** » 04 Dec 2019 10:31

Guys, it would be better if you read in context, rather than jumped on a perceived point which had already been addressed.

Obviously you don't stop imports completely, you just ensure that the costs in actually making those items are front loaded on them via anti-dumping duty! Or put restrictions to ensure localization occurs.

Read what I said. Restricting imports on a case by case basis (in other words, use our brains plus data to see who is gaming our system) and using anti-dumping duties or other measures. If Oppo wants to sell in India, let them assemble here. Do that across the board, not just mobile phones. Ensure that GOI rules are strict about data security etc. It runs the risk of raising cost/unit but check that vs the forex lost in paying off massive import bills for the entire unit and the revenue gains from local employment.

No industry will thrive however if you allow the Chinese company which used the US market to offset the costs for a 10,000,000 production run then run the rejected items into India at a tenth of the cost!

You have to have a balance. In short, you cannot expect your opponent, which is what the Chinese are, to play fair and then sit and sit in over-analysis about indigenous industry or bullies and children and similar stuff.

The Chinese don't give a sh!t about all this. They imposed tough rules about the % of local production even imports had to have, and corporates fell over themselves to comply. One company I saw first hand, overnight sold off their majority stake to their local PRC partner, otherwise they were pure and simple locked out of the majority of local PRC Govt deals. In India, NITI Aayog and VK Saraswat took 1 entire term to force recalcitrant GOI departments to follow Make in India. Clearly, there was more than bureaucratese going on and hence the resistance.

The PRC has entire legal teams dedicated to finding out how to game "fair play" WTO rules and when it comes to exports, they don't give a fig about most of these rules anyhow. They operate via a complex intermediary of 3rd parties who source stuff from often Govt owned or backed firms and insulate them from legal challenges too.

When it comes to localization, I know of multiple firms who made everything from LCDs to chips to complete assemblies who were given an unequivocal message, want our market, "move here". And after they moved, a decade later, the same management + workers who were trained in those firms moved outside and set up their own organizations and those guys are now Ali-expressing the whole world.

US etc have entire academic teams who have documented it, made a case to their Govts about how fair play rules can hence be set aside as the PRC are gaming the system, we in India are debating about "productivity gains", "feed children healthy food" or whatever the topic is while missing the entire point.

The point I reiterate, for those who want a summary, is not to operate a closed economy. But one which runs a tight ship in *incentivizing* manufacturers to move here across the board - that will automatically induce competition and also, focuses on sufficient measures to ensure MSMEs get a basic chance to fight and survive, scale over time.

Right now, when I go to the market, literally 50% of the basic items, which India can easily make inhouse are imported.. it ranges from nail cutters to scissors to locks, to toys. Even if everything was imported, from raw materials to the machinery used to make these items, making them in India would still entail value addition and offer employment.

Reason its not being done, is pricing. Some of these items are available at ridiculous costs and are marketed across India by pvt groups who visit China and imported rejected, or relatively low quality gear at huge mark downs. You can get a pen-knife like a Victorinox one for a 100 Rs. Try it against any hard surface though and it bends. But point is that sale, just took away the job of some dude in Lucknow who was running a small knife shop.

Then there is the massive fakery. Indian market is full of fake items sold off as original. From fancy stationery to even electronics. Clearly, enough is not being done to prevent its import. Meanwhile, they are gobbling up options Indian manufacturers would otherwise have. In a conversation with a guy who is into making relatively ok ok quality stuff, he mentioned fakes have taken up 40% of his addressable market, so he doesn't have the financial justification to ask his foreign partner to transfer more production of the higher end luxury items to India.

So they are stuck at basic assembly and tomorrow, that same production line may go to China or elsewhere. And we will import that too. Chinese "originals" vs Chinese "fakes".

nandakumar · Post by **nandakumar** » 04 Dec 2019 10:43

Is the Indian economy at all going to be able to compete with China in mass manufactured consumer goods? Let me share a personal experience. I was looking to buy some clips for hanging clothes to dry. I went to Nilgiris department store. They were offering a strip of 36 pieces imported from China for a price of Rs 25! I mean, less than a rupee per clip. The packaging claimed that it was made from bamboo. It looked like bamboo although I can't be sure. If you knock 25% trade margin, we are looking at a manufacturing cost of 60 to 70 paise per clip. Now, can a Indian manufacturer match this cost? Seems unlikely.

Karan M · Post by **Karan M** » 04 Dec 2019 10:48

Exactly, you have to start imposing proper costs/ anti-dumping duty. They are dumping items on India at a ridiculous price. From basic clips (like you mentioned), household goods... literally whole market is full of Chinese crap which is an offshoot of the capacity they built for export. People are just shutting down businesses. Another anecdote, a few years back, if I wanted a luggage lock, I had 2-3 desi vendors, and 2-3 Chinese options. Now there is only one desi vendor (in my area) and even that guy's quality is worse (fit and finish) versus the brass Chinese items, because they were available dirt cheap. How will he compete and upgrade, if he has no business? Second, its not just consumer goods. India let Chinese power firms in without stopping them. Multiple desi firms purchased their turbines/generating gear. Most had failures, experienced lousy service went running back to BHEL. Question though is what of the value lost, the productivity lost and the amount of business lost to PRC guys who got a sales bonanza even if for 1-2 business cycles, till the quality of their stuff became apparent? I am not even sure we are tracking this at the level it needs to be tracked.

Karthik S · Post by **Karthik S** » 04 Dec 2019 11:02

First we need to get our infra in place. So many companies are shifting their manufacturing base from China to Vietnam. We could have gained a lot from it, if we had good infra. A few years back, there was ridiculous amount of power cut in southern city of Coimbatore, which has many industries. How can one ask to produce in India if we lack such basic infra. Govt needs to go on infra spending spree for the next decade, there's no other option.

BTW, I see lot of people complaining about ever existing bureaucracy in setting up new facilities as well.

vishvak · Post by **vishvak** » 04 Dec 2019 11:12

Panasonic sold part of semiconductor business
A few details in an image.

sajo · Post by **sajo** » 04 Dec 2019 16:21

Talking about Chinese imports : The Indian consumer has now tasted blood, unlike the 1950s through 80s. We know how our needs can be taken care of by cheap imports, which appear to be of high quality at an affordable price. Slowly start anti-dumping duties on the low end goods, start making them expensive, some entrepreneur is bound to see the opportunity and fills the cost void with Made-In-India stuff. Even street vendors at Traffic Signals sell chinese stuff, this is not essential, can easily be produced in here (how difficult to manufacture a windup toy, or a phone holder?) and absolutely needs to stop.
Heard of Indian traders in China buying factory seconds in huge bulk and dumping them in India. Just go to Amazon.in and search for something small. Chances are almost all products are exactly the same and just have different trader labels. I truly wish Amazon/Flipkart dedicate sections to Made in India goods on their website.

Supratik · Post by **Supratik** » 04 Dec 2019 21:38

I wholeheartedly agree with what you guys say. When you have to provide jobs to 12-13 million people entering the market every year you grab whatever you can do. Can't do no chi chi. Every job counts. Indian babus and netas have not gamed how the system works. This govt is at least trying in fits and starts.

disha · Post by **disha** » 04 Dec 2019 22:14

Dileep wrote:We had "restricted imports" for a long time. We ended up having 1950s products continue in 1980s. Friggin razor blades were being smuggled then. Industry will doze comfortably behind the trade barriers onlee.

The license-raj and multiple tax-layers coupled with inflexible labour laws and lack of infrastructure and extremely heavy-handed rent-seeking bureaucracy created above hell-hole you mention.

Indian manufacturing industry was never allowed to grow roots. Even if it could innovate, all the innovation was sucked away by rent-seeking bureaucrats. Of course any 'industrialist' would then compete by how much of political payoff they can do.

So 'restricting imports' is actually a good thing. Concomitant to that should be 'ease of doing business', 'ease of setting up a business or industrial facility' and 'ease of running a business'.

Hence to say 'Industry will doze comfortably behind the trade barriers' is a lie. Industry does require some trade barriers and local support and Industry can be made competitive.

KJo · Post by **KJo** » 04 Dec 2019 23:44

Supratik wrote:I wholeheartedly agree with what you guys say. When you have to provide jobs to 12-13 million people entering the market every year you grab whatever you can do. Can't do no chi chi. Every job counts. Indian babus and netas have not gamed how the system works. This govt is at least trying in fits and starts.

I think the problem is in expectations. From 1998 onwards, people got a lot of easy jobs doing Y2K, testing, development etc. Everyone got a decent to high paying job without much struggle. Business cycles have changed and it's been 20+ years since and the mentality is to look to the Government to "provide" jobs. People then compare with how great things were in the good ol 90s and could blame the government for not being their sugar daddy.

Supratik · Post by **Supratik** » 05 Dec 2019 00:56

We are not talking about high paying jobs as in every country they go to a minority. We are talking about two things. Why India can send mars mission but cannot make basic stuff of good quality. It is what I call the Soviet syndrome. The Soviets had the same problem. The reasons have been described above and can be attributed to the past when India was a socialist state. The other thing you are missing is that every year close to 1% or 10 million people are leaving agriculture and they need jobs. They are not looking to become CEOs of companies. They are looking for entry level jobs and basic manufacturing can provide that.

kit · Post by **kit** » 05 Dec 2019 01:46

Someone had posted an article about how the British has embedded the babudom Indian bureaucracy with industry stifling measures (ostensibly to support the whole scale British imports and kill off indigenous industry ) before independence and some even being continued now, can't find article or source now. If anyone knows please post. The issues with the Indian economy are deep-rooted there is no overnight solution.

nam · Post by **nam** » 05 Dec 2019 02:11

What Indians can or cannot build is depending on the demand. As simple as that. It applies to Chinese as well. Chinese could build, because they have demand.

L&T shipyard is able to deliver ships 1 year before contracted date. MDL 5 years after the contract date. The difference is one is a business, the later is a job lot.

We cannot build stuff in high technology, because GoI has a strangle hold on high technology items. You cannot have private innovation, when demand is tightly controlled by GoI.

Take Tonbo Imaging. Top notch stuff, takes a decade for GoI to even realize there is something called Tonbo. Another decade to call them for trials. Til then GoI was feeding BEL to make build "something" to tackle night blindness in our forces.

Even roads are build by a GoI entity! You want innovation, you need to have private entities able to bag large contracts. No demand, no money, no innovation.

Kati · Post by **Kati** » 05 Dec 2019 04:37

Business
India's services industry returns to growth in November on strong demand - PMI
Reuters Reuters 13 hours ago
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A waiter arranges plates at a counter stacked with breakfast items at an Iranian Parsi restaurant in Mumbai
BENGALURU, Dec 4 (Reuters) - India's dominant services sector bounced back to growth in November, expanding at its fastest pace in four months, driven by a strong pick-up in new business, a private sector survey showed on Wednesday.

The Nikkei/IHS Markit Services Purchasing Managers' Index rose to 52.7 last month from 49.2 in October, above the 50-mark separating contraction from growth on a monthly basis.

"The main positive to be taken from November's survey was a renewed increase in new work, which provided the platform for growth of services activity and employment whilst resulting in an improvement in business confidence," said Pollyanna De Lima, principal economist at IHS Markit, in a press release.

A sub-index tracking demand jumped to 53.2 from October's 50.1, encouraging firms to accelerate hiring at the fastest pace in three months.

Wednesday's upbeat survey comes after official data showed India's annual economic growth slowed to 4.5% in the July-September quarter, its weakest pace since 2013.

The Reserve Bank of India has cut its key interest rate five times this year and was expected to lower borrowing costs by 25 basis points to 4.90% on Thursday, according to a Reuters poll.

The sharp expansion in both services and manufacturing activity pushed a composite index to a four-month high of 52.7 in November, from 49.6 in the previous month.

(Reporting by Shrutee Sarkar; Editing by Sam Holmes)

Rishirishi · Post by **Rishirishi** » 05 Dec 2019 05:05

Is the Indian economy at all going to be able to compete with China in mass manufactured consumer goods? Let me share a personal experience. I was looking to buy some clips for hanging clothes to dry. I went to Nilgiris department store. They were offering a strip of 36 pieces imported from China for a price of Rs 25! I mean, less than a rupee per clip. The packaging claimed that it was made from bamboo. It looked like bamboo although I can't be sure. If you knock 25% trade margin, we are looking at a manufacturing cost of 60 to 70 paise per clip. Now, can a Indian manufacturer match this cost? Seems unlikely.

Exactly.
The transport, margins etc are more then 25%. It is probably closer to 50%. If someone can manage to manufacture clips, let them. Burning midnight oil to snap the 35 Paise per clip business, wont get India anywhere. The same goes for solar panels, T-shirts, bags etc, etc. People making such low end panels, simply do not earn enough to do R&D. It is all about producing copies for cheap. People think that China is progressing becase they put the "Made in China" label on all products. It is not the case.
The Chinease actually make more selling in the local market, compared to exporting.

A_Gupta · Post by **A_Gupta** » 05 Dec 2019 08:59

^^^ Manufacturing PMI is also in expansion territory (51.2) though optimism about the future is down.
https://in.reuters.com/article/india-ec ... NKBN1Y60E0

csaurabh · Post by **csaurabh** » 05 Dec 2019 10:22

So we are not going to manufacture high end stuff because our mfg ecosystem is quite low end and not up to the task.
And we are not going to manufacture low end stuff because we can import them cheaply from China.
Then what are we going to manufacture?

Karan M · Post by **Karan M** » 05 Dec 2019 10:46

csaurabh wrote:So we are not going to manufacture high end stuff because our mfg ecosystem is quite low end and not up to the task.
And we are not going to manufacture low end stuff because we can import them cheaply from China.
Then what are we going to manufacture?

Please don't ask such questions. We will move into manufacturing space technology on Mars.

nandakumar · Post by **nandakumar** » 05 Dec 2019 10:51

Indian commercial vehicles seem to hold their own against competition from China. Essars collaborated with a Chinese company to produce trucks (Asian Motor Works). But Tatas and Ashok Leyland beats them quite handily. Even Bharat Benz is struggling to scale up.

Yagnasri · Post by **Yagnasri** » 05 Dec 2019 11:06

We already did start well now, though very late start, in Mobile set manufacturing. There is nothing stopping us than the commitment to do the same in other products especially the electronic products.

Vikas · Post by **Vikas** » 05 Dec 2019 14:15

How do you compete against Chinese onslaught ?
We have seen that Micromax and Carbon brands tried but failed. At one point Micromax had best selling mobile phone in 5 inch space and then it all went south.
E.g: If someone in India wants to compete against Chinese/Koreans in Cell phone or TV space, how does one do it or has the ship already sailed. No big Industrial house is really is competing in consumer electronics space.
Do we find a new niche or demand and work on it ? GoI doesn't have deep pockets or inclination to subsidize export oriented industry beyond a certain point.
Very soon we will see flood of Chinese automobiles occupying top 2-3 positions in India.
Hector was a good example and soon we will see more.

nam · Post by **nam** » 05 Dec 2019 14:58

MoD today provided a statement that 196K Crores worth of contract was signed with "Indian industries".

That is roughly 29 billion dollars. 80%-85% of it was to DPSU, resulting in absolutely zero growth of technology, process or anything else on that 80%. Creation of stuff, which only the Indian services will buy. No one else.

Out of the remaining, the biggest is L&T assembling or building K9.

You noticed the problem? You cannot develop technology or high end stuff, when the money is poured in to a dead end.

M_Joshi · Post by **M_Joshi** » 05 Dec 2019 16:59

If the Govt provides 0% direct tax on any new mass market manufacturing industry e.g. LED panels to Indian manufacturers, what's the loss to the govt.? Govt is anyways not getting the revenue since they are not being manufactured but imported. Import Revenue duty loss can be offset by normal taxes on supporting industries set up for that particular industry which will also spring up. Plus since capital is not going out of country that's a win also. Jobs will be created who will become direct tax payers. Isn't that how China grew? What's so thick about it that babus can't grasp.

Yagnasri · Post by **Yagnasri** » 05 Dec 2019 17:06

M_Joshi wrote:What's so thick about it that babus can't grasp.

They dont want to grasp anything sir. That is the problem. They have nothing at stake in our nation. Their salaries and pension and other benefits (and loot if they are looters) dont depend on any postive activity.

M_Joshi · Post by **M_Joshi** » 05 Dec 2019 17:15

Plus let's look at the current slowdown from global perspective. Globally trade wars have affected some countries but to what degree? US is growing faster than they were 4 years back. Chinese despite trade wars is growing 6%+. That's approx $800B added to their GDP. Plus demand has slowed domestically. People are not buying cars in India, not that Indian car exports have shrunk only.

Domestically I think it is the babudom that is hitting back at Modi. Modi said at the start of his 2nd term to babus that I'll not let you ruin my 2nd term like you did my 1st. Seems like this multi headed babudom snake has taken it to its heart to dis-credit Modi with help from cong ecosystem & old guard. Babus like congoons thought Modi is a 1 time phenomenon & will pass. They've not forgotten the forced retirements given to so many babus in last term & his verbal threat at the beginning of 2nd term. That's why Nirmala was made FM instead of Piyush Goyal. Goyal for all his intelligence seems to have less control over his babus. Case in point is Make in India Train 18 which has been slaughtered by inter dept babu fighting & he has been nothing but a mute spectator on the sidelines. This project was a showcase of our PSU innovation & a step towards in house HSR capabilities. But Electrical division of IR killed the project & Goyal could not do jack***t to stop it from happening. Modi knew babus will come hard at him this time & they've. That's why no major & sweeping reforms happening. A driver can only do so much if the wheels lock themselves up. And these babus heart must wrench when they would have seen their seniors gobble cash like pacman before 2014 & when their chance came Modi is not letting them fill their pockets.

No growing economy means no money to fund Modi schemes means no Modi in 2024. Let's see who wins this tussle.

Kaivalya · Post by **Kaivalya** » 05 Dec 2019 19:07

^ I think we are over simplifying the manufacturing issue here . For example MicroMax vs Xiaomi is not just an issue of chinese manufacturing/dumping into India. Please note

1. Micromax et all were leaders in "Feature phone" market as opposed to "Smart phone" market

2. Xiaomi's CEO is on the record saying their plans were to sell 10,000 in the first year - except they sold 9 million

3. Micromax et all tried to create a "Smart Feature phone" in the less than 5000 Rs category that was not successful

4. Xiaomi has 6 Indian assembly plants as opposed to others like Samsung,Vivo etc.

5. Xiaomi is losing market share in china to others even though it unseated Samsung ( not micromax) in india in the smartphone market

6. Xiaomi has avoided tariffs because of locally assembling and attempting to manufacture/source locally.

7. One of the reasons why we can tell apple or samsung to do it in India is because of xiaomi. The argument will be slowly extended like if you can sell here assemble here; if you can assemble here you can source here etc. Slowly fine tuning tax breaks and tariffs ( carrot and stick ) over period of time

In other words, Xiaomi won by product offering, local assembling and a combination of other factors even though their competition outspent them. For folks worried, it will take some more time to reduce imports that can be sourced locally.This has to be done industry by industry, product by product prioritized by lost foriegn exchange and national interest . We need a MakeinIndia ministry with long term vision and business acumen/execution on equally long term

https://money.cnn.com/2018/04/30/techno ... index.html

https://www.businesstoday.in/magazine/f ... 57815.html

Supratik · Post by **Supratik** » 05 Dec 2019 19:23

Car market will rise after BS6 comes into force in April 2020. Tata and Mahindra are doing well in India with new launches and Hero, TVS are doing well in motorcycles. Bajaj did not see the big picture and is getting knocked around.

We have to understand in a market economy competition is fierce and only the nimble will survive. This is true even in the US where except high end electronics there are practically no US companies.

Micromax, Karbon, etc could not game the system e.g. if they had gone for JV they would have benefited. Just stamping Chinese products is a death wish. They did not see the emerging smart phone explosion clearly. But all is not lost. As the ecosystem gets built in India they can still bounce back as India still has cost arbitrage.

Supratik · Post by **Supratik** » 05 Dec 2019 19:26

Similar is the case with solar equipment. India is going to need gazillions of energy in the near future. They can still bounce back.

But need a proactive govt.

kit · Post by **kit** » 05 Dec 2019 19:44

Why not give Chinese consumer good manufacturers incentives to build in India or lose business ., find major consumer brands like TCL

Let them make paper clips on the cheap i will be more concerned about higher-end products like TV , air conditioners, washing machines etc

The Chinese way of beating the competition ?.. find your opponents, see how they manage quality and production, buy or steal their tech and build cheaper with less Quality control, there is guaranteed market in less advanced countries.

kit · Post by **kit** » 05 Dec 2019 19:49

M_Joshi wrote:Plus let's look at the current slowdown from global perspective. Globally trade wars have affected some countries but to what degree? US is growing faster than they were 4 years back. Chinese despite trade wars is growing 6%+. That's approx $800B added to their GDP. Plus demand has slowed domestically. People are not buying cars in India, not that Indian car exports have shrunk only.

Domestically I think it is the babudom that is hitting back at Modi. Modi said at the start of his 2nd term to babus that I'll not let you ruin my 2nd term like you did my 1st. Seems like this multi headed babudom snake has taken it to its heart to dis-credit Modi with help from cong ecosystem & old guard. Babus like congoons thought Modi is a 1 time phenomenon & will pass. They've not forgotten the forced retirements given to so many babus in last term & his verbal threat at the beginning of 2nd term. That's why Nirmala was made FM instead of Piyush Goyal. Goyal for all his intelligence seems to have less control over his babus. Case in point is Make in India Train 18 which has been slaughtered by inter dept babu fighting & he has been nothing but a mute spectator on the sidelines. This project was a showcase of our PSU innovation & a step towards in house HSR capabilities. But Electrical division of IR killed the project & Goyal could not do jack***t to stop it from happening. Modi knew babus will come hard at him this time & they've. That's why no major & sweeping reforms happening. A driver can only do so much if the wheels lock themselves up. And these babus heart must wrench when they would have seen their seniors gobble cash like pacman before 2014 & when their chance came Modi is not letting them fill their pockets.

No growing economy means no money to fund Modi schemes means no Modi in 2024. Let's see who wins this tussle.

I thought the train 18 is already in production?

Supratik · Post by **Supratik** » 05 Dec 2019 20:08

They are all moving to India. Next should be component and subcomponent manufacturers with the right govt policy. Then you have an ecosystem. After that it is upto Indian companies to leverage. Tata and Mahindra are doing that with cars. No reason others cannot do it.

M_Joshi · Post by **M_Joshi** » 05 Dec 2019 22:55

kit wrote:I thought the train 18 is already in production?

It's a mess.

The team which innovated & completed the project under budget in record time is being hounded by other babus for daring to do something new & out of the box, when they could've just sat on their asses, not do anything & collect pension.
ICF team of Train18 comes under vigilance scanner
Train-18: 9 officials sent questionnaires on ‘irregularities’
Chennai-based ICF may not make Train-18 in near future

"Elaborate Plan To Sabotage...": Official To Railway Board On Train 18

According to officials, the realisation of Train 18 by ICF is an achievement similar to Brahmos missile and Chandrayaan

The Chief Administrative Officer at the Rail Wheel Plant in Bihar, Mr Shubhrangshu, wrote to Railway Board Chairman VK Yadav and says of the vigilance probe that "the purpose seems to be to sabotage the indigenous train forever and to kill initiative. The intent behind such 'fixing of officers' and creating terror is well understood."

"What started as accusations of violating procedures against the innovative, bold and nationalistic team of ICF (Integral Coach Factory, Chennai) later evolved into a full bloom vigilance inquiry," Mr Shubhranshu said.

A retired ICF official on conditions of anonymity told IANS that the initial complaints about Train 18 were thought to be by some jealous officials.

"But now it seems it is part of an elaborate plan to sabotage India's attempts to roll out semi high speed trains and breaking into the elite club of such train makers," he said.

According to the officials, the work on rolling out Train 18 has come to a standstill, while the government is looking to import of trainsets.

"I have learnt that an import proposal for sixty trainsets have been made costing over Rs 25,000 crore citing delay in production of Vande Bharat Express by ICF," Mr Shubhranshu said in his letter.

"So, what started as an inquiry into alleged corruption in ICF and what was intended to create more competition and level playing field has turned out into a sinister exercise to import when we should have been proudly exploring export markets," Mr Shubhranshu told the Railway Board Chairman.

Railway Board to import 60 train sets, ICF not in procurement plan

No sane minded PSU worker will try to innovate now if they will be hounded like this for doing something good. What is this supposed national govt for if this is happening right under their noses in the Railway Board which should've been cleaned of roach babus in the last 5 years. Even a successful Make in India product like Train 18 can be killed & substitutes imported at double the price. Train 18 is ready to be rolled out by dozens every year but this procurement will take years before we even see a train. But the babus of Railway Board will get free abroad trips if they go for phoren maal.

Modi need to do a surgical strike on babucracy immediately otherwise they will take him down & we might not see another Modi for decades. These babus are nothing but congoons in grey suits.

arshyam · Post by **arshyam** » 05 Dec 2019 23:00

Modi needs to fire Piyush Goyal for letting this drama go even this far. Very lacklustre performance even otherwise. Where the heck is Suresh Prabhu?

Supratik · Post by **Supratik** » 05 Dec 2019 23:27

That is old news. 40 trainsets of T18 are on order for the next 3 years. There is no clarity on imports yet but it is circulating. One of the problems flagged about T18 is low energy efficiency leading to higher operating costs. PG has had a better track record than SP in railways. There is no problem if govt wants to get into a JV with foreign manufacturers. That is how China moved up the ladder. I am against any direct imports.

M_Joshi · Post by **M_Joshi** » 06 Dec 2019 00:05

Supratik wrote:That is old news. 40 trainsets of T18 are on order for the next 3 years. There is no clarity on imports yet but it is circulating. One of the problems flagged about T18 is low energy efficiency leading to higher operating costs. PG has had a better track record than SP in railways. There is no problem if govt wants to get into a JV with foreign manufacturers. That is how China moved up the ladder. I am against any direct imports.

All news links I provided are lass than a week old.

. CHENNAI: Union railway minister Piyush Goyal on November 27 informed Parliament that Chennai-based Integral Coach Factory (ICF) will manufacture 160 coaches of Train-18 in 2019-20. However, top railway officials say that it is unlikely that even a single coach of Train-18 will roll out of ICF this year — or in the near future — as top companies have raised concerns about specifications for procurement of a new electrical propulsion system..
vigilance probe is also looking into the procurement of the ..
This means ICF would not be able to deliver the third Train- ..
before March 2023, even as the nation waits, the letter added

Read more at:
http://m.timesofindia.com/articleshow/7 ... aign=cppst

Dec 2, 2019

Also Modi has gone in maun vrat recently. No public speech or kadak soundbites after Houston event.