Indian Economy News & Discussion - Nov 27 2017

[drnayar]

Going to leave this here ; Robotics is taking over, the era of manual labour is diminishing



R2 D2 FOR REAL !!

[S_Madhukar]

Yup more! The new Atlas can do some proper breakdancing as well
https://youtu.be/I44_zbEwz_w?si=ay9FtZDwtMw2prvU

[Vayutuvan]

Going to leave this here ; Robotics is taking over, the era of manual labour is diminishing

[youtube...]BFiBZI3nqhQ[/youtube]

R2 D2 FOR REAL !!

Very cheesy demo. I am not that excited. Still skepticAL.

[Hriday]

D.Muthukrishnan, a certified financial planner with 549K followers in X posted the below.

So many BJP supporters are celebrating how India's GDP doubled between 2014 and 2024 - from $2.1 trillion to $4.2 trillion, a nominal growth rate of 7.2%

Let me share another data:

Between 2004 and 2014 - India's GDP tripled from $0.7 trillion to $2.1 trillion, a nominal growth rate of 11.6%

Wish MMS had a fraction of marketing skills of Modi.

Sorry if it is repeat of the subject again. I had read in the Economics thread here that India had changed the way GDP is calculated to keep it more aligned with international standards (change in the base year). Over an year ago saw a Twitter thread which stated that Cong deliberately kept the old method of GDP calculation to artificially boost the GDP growth. Can anyone confirm it if it is true?

In Grok search It is said that there were some short term negative influences on GDP growth due to the implementation of 1. demonetization, 2. GST system and the Corona pandemic shutdown etc.

Is it possible to say that barring the above three negative factors the GDP growth rate is better in the later years of Modi govt? I was thinking that the massive infrastructure build up should have an effect on GDP.

[gakakkad]

Just plot graph, plot graph of first and second derivative. It'll all be clear. Mms inherited not only an accelerating gdp but even the rate of acceleration was increasing. The best growth happened from 2004-2008. He gave modi a flat lining gdp. Between 2012 - 2015 we didn't even add 500 b .also there were global headwinds from 2004-2008 that enabled numbers then .

[A_Gupta]

“ In 2004, India’s GDP stood at $721 billion, which rose to $2.03 trillion in 2014. That is an increase of 182 per cent. That looks excellent on paper. But only until you compare it with India’s peers in the BRIC. In the same period, China’s GDP expanded by an astonishing 440 per cent. The GDP of Brazil expanded by 267 per cent, and that of Russia by 223 per cent. Unfortunately, this made India the worst performing BRIC economy during the period.”

[Cyrano]

https://www.financialexpress.com/busine ... y-3792684/

Meet the man who built India’s first E-commerce empire and then lost everything- FabMart founder tells his story.

[Vayutuvan]

"In the same period, China’s GDP expanded by an astonishing 440 per cent. The GDP of Brazil expanded by 267 per cent, and that of Russia by 223 per cent."

If you go by numbers, yes. But just the numbers is not everything. China was exporting to the US and India as well. Russia got a lot of money for its fossil fuels exports to EU. Brazil doesn't need to spend as much on defense as India does. A lot of spend is on imports.

[gakakkad]

^ plenty of missed opportunities back then . Cost us at least a couple of trillion dollars gdp numbers by now .we would have been 6.5 trillion had we had someone proper running government then. Investment to gdp went down in both public and private sectors and in India that is strongly correlated with growth numbers . Only now is our investment to gdp and capital formation to gdp catching up with 2004 numbers . Suraj saar has an entire thesis on that .

[A_Gupta]

Total Net GST Revenue: (lakh crores)
Mar 24: 1,64,592
Mar 25: 1,76,526
Growth: 7.3%
YTD 24: 18,01,075
YTD 25: 19,56,034
Growth: 8.6%

[A_Gupta]

The most optimistic of the forecasts of the impact of Trump's tariffs on the Indian economy that I could find:
https://timesofindia.indiatimes.com/bus ... 905008.cms

[Suraj]

Mod Note

Thread cleaned up. All the conversation on culture etc are moved into the nearest appropriate thread - the Urban Development and Public Policy one.

I'm glad at least some folks recognize the irony of complaining about people making a mess in public while derailing threads to discuss it.

[sanjaykumar]

That is an insightful comment.

[A_Gupta]

With US tariffs, India's jewellery exports set for sharp decline
https://www.reuters.com/markets/commodi ... 025-04-03/

India's $32 billion gems and jewellery industry is bracing for a sharp fall in exports as hefty U.S. tariffs will impede overseas sales to its biggest market, industry officials said.

[Suraj]

The tariffs do not apply to energy, semiconductors, metals especially auto parts, pharmaceuticals - all of which are things India exports to the United States. In fact the top items between April-Jan 2025 are:
1. Pharma ($7.5 billion) : exempt
2. Cellphones ($7 billion) : not exempt, but competing sources are far more heavily tariffed
3. Gems / jewelry ($4.7 billion) : not exempt but more price inelastic
4. Petroleum refined ($3.5 billion) : exempt
5. Gold and gold jewelry ($3 billion) : part exempt as bullion
6. Iron and steel parts ($2.7 billion) : part exempt
7. Textiles ($2.5 billion) : not exempt but competing sources are far more heavily tariffed.
8. Electrical machinery ($2.3 billion) : not exempt but competing sources are far more heavily tariffed.

Trinh has an interesting thread on this on X/Twitter:

[Vayutuvan]

With US tariffs, India's jewellery exports set for sharp decline
https://www.reuters.com/markets/commodi ... 025-04-03/
...

Most jewelry makers here in the US are Indian-Americans. They are being protected by this. Jewelry imports already used to attract some customs duty at the port of entry.

[Cyrano]

A bit OT, but why is Vietnam getting shafted like this, more than China and everyone else? Mistake by Trump admin or is there some other reason?

[rajkumar]

A bit OT, but why is Vietnam getting shafted like this, more than China and everyone else? Mistake by Trump admin or is there some other reason?

Because Vietnam allowed Chinese companies to set up warehousing facilities to by pass the tariffs that DT imposed on China in his first term. BTW the same applies to Mexico as well.

https://mishtalk.com/economics/the-us-t ... 0-percent/

When looking at Sino-US trade, the value of China’s exports to the US should be less than the value of US imports from China. This is true for any bilateral trade relationship. Export numbers record the value of the goods exported when sitting on a ship about to leave a country. Import numbers record the value of goods when they arrive in a country. In between the two is the cost of transporting and insuring those goods, so the import values will automatically be higher than the export values. Critically, import values do not include any trade taxes—those are paid by domestic consumers after the goods have arrived.

If we look at China’s exports to Europe, or US exports to China, this is exactly what we find. The value of exports and imports move in sync, with the value of imports somewhat higher than the value of exports.

This used to be true for China’s exports to the United States. But in recent years, China’s customs data has shown China to be exporting more than the US is importing. The shift is not small—China claims to export almost 19% more than the US claims to be importing. Even that large gap understates the problem—China’s export values should be about 15% lower than US import values, given transport costs. Therefore, this change in the data either overstates China’s exports or understates US imports by over 30%.

[Cyrano]

Thank you for your educative post Saar, learnt something.

I suspect China is doing the same with India as well, and dumping a whole range of goods via other countries, which could explain at least in part our sluggish growth in MFG.

[saip]

A bit OT, but why is Vietnam getting shafted like this, more than China and everyone else? Mistake by Trump admin or is there some other reason?

Mistake by Trump? Never. He is a stable genius. Seriously, he used a weird formula (one of his loyalists published it some months ago - I think AmberG mentioned it) and one of his mindless acolytes got hold of a world atlas and the list of the 'countries' and slapped the tariffs. Otherwise, how do you explain tariffs on uninhabited islands which may not even be a country?

[Cyrano]

You have a point, but this is not the thread to discuss Trump.

[saip]

You have a point, but this is not the thread to discuss Trump.

I know, but you asked a q and I answered.

[Suraj]

Thank you for your educative post Saar, learnt something.

I suspect China is doing the same with India as well, and dumping a whole range of goods via other countries, which could explain at least in part our sluggish growth in MFG.

Indian FTAs with SE Asia have been used as a conduit to route Chinese exports to India .

Vietnam has a $100 billion trade surplus with the US mostly on account of Chinese warehousing and rerouting of exports through there to avoid tariffs - almost all of that surplus gained within the past 5 years. It worked until it just stopped working.

[Vayutuvan]

Understanding US is a better thread to trash GOP and DNC. Maybe.

[Vayutuvan]

@cyrano gaaru,
Poster @saip has no point.

viewtopic.php?p=2642644#p2642644

[Cyrano]

It's ok Vayu Garu. Beyond a certain level of curiosity I don't really care if Trump is good for America or if Biden was better. How their policies impact Bharat is what I try to analyse and understand. But then I don't live in the US so I don't feel the warmth or the heat

[A_Gupta]

A bit OT, but why is Vietnam getting shafted like this, more than China and everyone else? Mistake by Trump admin or is there some other reason?

Trade imbalance.
2024 goods trade (via https://apps.bea.gov/international/fact ... y42MC4wLjA.)

Vietnam exports to US = $138.4 billion
Vietnam imports from US = $13.1 billion
US trade deficit = 138.4 - 13.1 = 123.5
Ratio of US trade deficit to Vietnam exports = 123.5/136.6 = 0.904
Tariff = (0.904/2) * 100% = 45.2%.
Seems to be rounded up to 46%.

China exports to US = $439.7 blllion
China imports from US = $144.6 billion
US trade deficits = 295.1
Ratio of US trade deficit to Chinese exports = 295.1/439.7 = 0.671
Tariff = (0.671/2) * 100% = 33.6%
Rounded up to 34%
Also, the Chinese tariff on top of existing tariffs of 20%.
(i.e, total of 54%)

Likewise:
India exports to US = 87.4 billion
India imports from US = 41.8 billion
US trade deficit = 87.4 - 41.8 = 45.6
Ratio of US trade deficit to India exports = 45.6/87.4 = 0.522
Tariff = (0.522/2) * 100% = 26.1%.
Friendship with Modi cut off 0.1%.

---
Also, the Chinese tariff on top of existing tariffs of 20%.

[A_Gupta]

> When looking at Sino-US trade, the value of China’s exports to the US should be less than the value of US imports from China

The countries' statistical bureaus attempt to correct for the effects of transport and insurance costs. However the discrepancy goes beyond that. The New York Federal Reserve says it is difficult to explain but says that " an important set of factors involves fictitious exports from China to take advantage of certain value-added tax rebate benefits within China, and underinvoicing of U.S. imports to reduce tariff duties owed to the U.S. government"

[nandakumar]

Thank you for your educative post Saar, learnt something.

I suspect China is doing the same with India as well, and dumping a whole range of goods via other countries, which could explain at least in part our sluggish growth in MFG.

Indian FTAs with SE Asia have been used as a conduit to route Chinese exports to India .

Vietnam has a $100 billion trade surplus with the US mostly on account of Chinese warehousing and rerouting of exports through there to avoid tariffs - almost all of that surplus gained within the past 5 years. It worked until it just stopped working.

But aren't there value-addition norms in place to prevent bogus routing of trade? Of course I don't know how rigorous they are. If there are easy way-outs to escape value addition norms, then that is something to think about.

[Mort Walker]

Vietnam seems to be a conduit for trade with the Chinese. India's beef exports of are mostly to Vietnam. From there it goes to China.
For reference, India's beef exports are $3.5B/annually, compared to the US of $5.2B.

[drnayar]

The signals are getting louder.

I started getting messages from

old contacts across the USA

I hadn’t heard from in years.

They all have the same question:

“𝗖𝗮𝗻 𝘆𝗼𝘂 𝗺𝗮𝗻𝘂𝗳𝗮𝗰𝘁𝘂𝗿𝗲 𝗯𝗹𝗲𝗻𝗱𝗲𝗿𝘀 𝗶𝗻 𝗜𝗻𝗱𝗶𝗮?”

It caught me off guard.

But it also lit a fire.

For years, we’ve been

15–20% more expensive than China

because of their scale and variety.

But now, the tide is turning.

There’s a real shot to enter the

U.S. market with affordable,

high-quality manufacturing.

And we’re not hesitating - we’re all in.

But this is not just about 'blenders'.

It’s a signal.

A wake-up call for

every desi manufacturer across:
- apparel,
- electronics,
- FMCG,

you name it.

America is open.

https://x.com/prakdadlani/status/1910493113623142692

[drnayar]

Tim Cook explains why Apple chooses China for manufacturing.

https://x.com/AdameMedia/status/1910598431254491449

[uddu]

Why Apple Airlifted 1.5 Million iPhones Out of India | Vantage with Palki Sharma | N18G

[bala]

Tim Cook explains why Apple chooses China for manufacturing.

https://x.com/AdameMedia/status/1910598431254491449

Tim Cook does not explain how China has so many skilled technicians on machines perhaps imported from the Europeans and Japanese/S. Korea. Reason is simple - all phone manufacturers are in China. Technical pools is built up due to all of them being there. China brands took advantage of such talent pool and did their own versions. Yes labor requires deeper expertise in precision machines.

[drnayar]

Tim Cook explains why Apple chooses China for manufacturing.

https://x.com/AdameMedia/status/1910598431254491449

Tim Cook does not explain how China has so many skilled technicians on machines perhaps imported from the Europeans and Japanese/S. Korea. Reason is simple - all phone manufacturers are in China. Technical pools is built up due to all of them being there. China brands took advantage of such talent pool and did their own versions. Yes labor requires deeper expertise in precision machines.

china focuses on skilling their workforce, their technical pool of workers is much larger than india. how many in india focuses on vocational jobs despite the massive number of "engineers" in india ? strangely india lacks the right number of people with skills.. and that is a bugbear. also partly explain why most of Indian startups are consumer oriented

[drnayar]

india needs a FTA and a strategic alignment with usa . we cant sit on the fence this time. there is a congruence of interests in containing china. make good use of this opportunity

[A_Gupta]

Re: competitiveness:

Quality and speed trump labor costs. {Lesson: can't blame any Indian non-competitiveness relative to Bangladesh on labour costs.}

Bangladesh-Vietnam comparison:

The founder of the Korean Export Processing Zone also criticised Bangladesh's port bottlenecks and long lead times.


He noted that Vietnam can export apparel to the US market at least three weeks sooner than Bangladesh.

"A three-week gap is very critical in the fast-paced fashion industry," he said, adding that buyers naturally want to place their orders where they can be fulfilled quicker.

Bangladesh produces more commodities than Vietnam, but product quality is worse than Vietnam's, he said.

He added that buyers are paying higher prices when garments are made in Vietnam. As a result, although labour costs in Vietnam are about 40 percent to 50 percent higher than in Bangladesh, it is a more lucrative destination.

"Currently, we make more profit in Vietnam, which means Bangladesh is not winning this competition in the global market."

He said if Bangladesh could reduce customs-related delays by one week to 10 days, half of the hurdles that cause delays would be resolved. It would also help to overcome geographical challenges.

Logistics: India - Bangladesh comparison
https://www.thedailystar.net/news/bangl ... te-3868551

One of the main attractions of Indian air transshipment was the cost. While sending a kilogram of apparel from HSIA to Europe typically costs $2.90-$3.20 during off-peak periods (and up to $4.50 in peak season), shipping through India costs about $2.60 per kg, even after accounting for overland transport to Indian airports.
...
Ground handling fees are another sticking point. Dhaka charges 29 cents per kilogram compared to just five cents at Delhi airport.
...
Fuel costs also play a role. A $1-per-gallon difference in jet fuel prices between Dhaka and Delhi gives Indian airports a further edge.
...
There are also infrastructure-related challenges. For instance, a cargo aircraft that exceeds the prescribed weight limit cannot land at Dhaka airport because of the runway's limited strength.
...
Dhaka lacks world-class retail brand stores, which means there's little to no incoming cargo business. In contrast, when cargo aircraft land in India, they can bring in goods for stores in Delhi, Chennai, Mumbai, and other major cities, making the return trip economically viable.

"That's why the operating cost of cargo aircraft is lower in India -- they can carry goods both ways," he added.

Quality, speed in procedures, speed in logistics, scale in logistics, lower logistics cost -- the ingredients to being competitive.

Labor cost - yes. But for Vikasit Bharat we want people to earn more. Therefore, it is best to focus on being best in the world on the above ingredients. Get the factories into India also using lower labor costs -- but keep them in India and from moving to another lower-wage destination as wages in India rise, by better productivity (i.e., higher wages and also higher output per person) and the above.

[Suraj]

Meanwhile, quietly the Jal Jeevan Mission dashboard ticked past 80% of the country now having a household water connection:

https://ejalshakti.gov.in/jjmreport/JJMIndia.aspx

It's almost impossible to imagine how bad it was less than 6 years ago.

[S_Madhukar]

It is only now that we have articulated a vision and hence we now know what kind of labour we need and areas of focus.
Since our internal market wasn’t rich we ended up exporting IT Labour that was the only Western equivalent workforce.
Now is the time to retool our ITIs and bring them on par with IITs etc… we need champion machinists and welders too… I recall Japanese and Korean National TV have such competitions for best welder etc and may be Germans too . Can’t believe despite following Socialism we let worker skills wither. We might still poach some back specially ones in the Gulf.

I recall in the 1st year Engg workshop when filing some people would complain that this is no use, that’s a low job . That has led a society to shun working with hands and only glorify pushing paper and if we don’t want BD everywhere then decentralised vocational education is a must

[S_Madhukar]

I was recently in a well known private hospital. Great surgeons but nursing staff all Keralites were mostly trainees with zero comm skills . The pattern seemed work for a couple of years in well known private hospital and the smart and articulate ones could emigrate to Gulf, Europe etc. I hope we are training nurses everywhere in India else we too will be importing Hijabis