Question 16Discuss the advantages and challenges for IndiaGS3GS1

Why there is 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)

Introduction

There is an increase in "China!" initiatives across the world shifting industry bases from China to South & Southeast Asia.

20 words

Main Body

Reasons:

1. Demographic:

Increasing age population

High labour cost due to less salaries population

Benefit of "one-child" policy

2. Geopolitical reasons:

Anti-China stance post-COVID

Supply chain weaponization China

Australia trade tensions

American Tariffs - FTA in the prices

3. Other reasons:

Favorable industry environment in South/SE Asia

Vietnam, India

Large working age population due to lower median age

INDIA - "25" demographic advantage

Rise of Global South - "Anti-China policies"

Favorable politics

Tax labour codes

Advantages to India:

1. Attrition shift from China

Large working age population

2. PLFS data: men - 35%, women - 41%

3. Labour codes - new codes favour the industry establishment

4. BSOL Subsides manufacturing sector

Make in INDIA target (25%) GDP from manufacturing

5. Energy as manufacturing powerhouse in the region

Correct the "hollowing effect" of manufacturing

6. Structural transformation of economy

7. MSME culture - is strong

Can take the advantage

5. Energy as manufacturing powerhouse in the region

Correct the "hollowing effect" of manufacturing

6. Structural transformation of economy

7. MSME culture - is strong

Can take the advantage

Challenges Remain:

(I) Ease of doing business

While they start of in STEM industries subsequently also about (later stage)

(II) Sticky food cycle

Creating hindrances to participation

(III) Lack of skilled workforce - only 2l formally trained (Skill Report)

(IV) Labour union

Protest against stringent labour laws - deters investment

Conclusion: Thus, "peeling the onion approach" as highlighted by Economist, where regulatory burden is reduced. From Red Tapism to Red Carpet is the way forward

— Kiran Kamate · AIR 53

275 words15 paragraphs23 bullet points

Conclusion

Thus, "peeling the onion approach" as highlighted by Economist, where regulatory burden is reduced. From Red Tapism to Red Carpet is the way forward

24 words

Diagram

Hierarchical structure showing reasons for industry shift with 3 main categories (Demographic, Geopolitical, Other) with numbered sub-points

Identifies multiple categories of reasons
Links to India's demographic advantage (25 median age)
Mentions specific countries and policies
Comprehensive structure

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Topper

Kiran Kamate

AIR 53

Subject & Paper

GS3GS1

Topic

Economic Issues and Development

Industrial Relocation and Labour Economics

China to South/Southeast Asia Industry Shift

Writing Stats

319

Total words

Paragraphs

Bullets

Linked PYQ

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