Why is there a shift of labour-intensive industries from China to South and Southeast Asia? Discuss the advantages and challenges for India in this context. (Answer in 250 words)

Reasons for shift:

Advantages for India:

Challenges:

Growing of Chinese economy causing higher labour costs in China

Diversify supply chain to reduce risks due during COVID

Policies of other nations to attract industries - More in India, PLI scheme

Advantages for India:

Increased jobs in manufacturing / textile sector in India - 8 million non farm jobs must be added annually to reach goal of developed nation by 2047

Boosting economic growth

Increasing exports of India - Textile sector exports

Reducing reliance on China for imports by diversification

Challenges:

Increased competition from nations like Vietnam & Taiwan

Poor connectivity infrastructure of India hurts exports competitiveness - 14% of GDP = Logistics costs

Exploitation of Indian labour by foreign companies - NHRC notice to Foxconn over gh policies

Shift away from high productivity service led growth

This shift is crucial for India to reap benefits of it's demographic dividend & become a developed nation by 2047

Reducing reliance on China for imports by diversification

Challenges:

Increased competition from nations like Vietnam & Taiwan

Poor connectivity infrastructure of India hurts exports competitiveness - 14% of GDP = Logistics costs

Exploitation of Indian labour by foreign companies - NHRC notice to Foxconn over gh policies

Shift away from high productivity service led growth

This shift is crucial for India to reap benefits of it's demographic dividend & become a developed nation by 2047

— Aryan Yadav · AIR 31