Fred Chuatiuco Former Healthcare CFO
“More friendly to their political conception”? This would have to be China, not India.
The politics of business is to make money. For this, you need to have the infrastrusture and people that can get it done. More importantly, its what India has in abundance of that are turning companies away - graft, red tapes and bureacracy.
Plain and simple. Anything else you need clarification on?
Dan-Wee Loh Former Global Supply Manager at Oil Majors (1991–2016)
Alexander Nguyen, interesting that you do not ask why western countries would rather put their factories in VIETNAM instead of Democractic India !
Both China and Vietnam are transformed communist countries that adopt free market economy.
If you are western capitalist businessmen, one fundamental question capitalists will ask is which country China vs India, Vietnam vs India will give the best ROI with the highest rate of success ?
Businessmen are practical people. They follow where the money can be generated. As such, it is obvious that China overwhelm India in attracting FDI.
The other key point is China and Vietnam does NOT have democracy mixed with caste system. India has the toxic combination of both which explains why things will be done at snail crawling speed in India.
Real case study
I was working in Project management consulting company during the year around 2010, a Finland company wanted to put up a factory in the one of the Indian Western states. I was the PM for preparing feasibility report and initial building design and obtaining approval from the state authorities. We did the work in stipulated time and submitted everything. They also bought land for the project. But the Finish company consulted another Indian consultant for optimization of their capital and operating expenses in new projects. Based on another consultant's advice the Finish company shift...
Cliff P. Edge
Conversely, one could ask why Bill Gates hired Indians for software development and tech support? Why have Indians played such a crucial role in Silicon Valley? They seem to have a natural talent for math and software.
One factor surely must be that English is more widely spoken in India, due to their centuries of British colonization.
To get back to your question, perhaps manufacturing runs better under totalitarian governments. Manufacturing requires a high level of discipline and organization.
Dr. Balaji Viswanathan follows government policies closely.
Businesses care less about democracy and more about ease of business. China was much easier to do business with. I have traveled to China a lot and found their businesses to be much more faster at decision making than India’s.
* China focused on infra building since the late 1970s and by 1990s had much better infrastructure than India. The gulf between the countries has since widened a lot. The quality of Chinese supply chains is simply a wonder where India is significantly behind.
* China created a massive availability of labor pool at the lower levels, by focusing on basic worker education and women labour. This was one good thing the Communists did. India has not focused enough on building a large enough worker pool for factories to hire. Thus, Indian factories suffer from a shortage of quality labor at the lower levels.
* Indian governments were traditionally a mess to deal with as governments at all levels didn’t appreciate the importance of manufacturing. The attitudes changed a little bit since 2014, but not very substantially. Even today, it is a suicide to attempt a manufacturing startup in India. If you are a large foreign company or a very large domestic company then it is ok.
* Indian attitude towards manufacturing has either been at the vanity level [getting the likes of Tesla and Apple] or trying to support unsustainably small enterprises. This is terrible short-sighted. Most countries including China, Germany and Japan build bulk of manufacturing through mid sized businesses.
* India’s power supply was erratic, expensive and weak. Fortunately this part was improved substantially in the past decade.
There are changes happening for sure, but for India to attract large scale manufacturing like China did in the 1980s and 90s, deeper changes have to occur. I don’t think India’s politicians or bureaucrats have much of an idea. I have spent years in India’s manufacturing, spent a lot of time understanding China’s manufacturing and talk to bureaucrats often but not once I was asked on problems that Indian startups face in this sector. Indian civil servants and politicians assume they known the answer and remain clueless to the ground reality.
That's true. Bureaucracy and compliance is a huge pain point. I worked in compliance before leaving India and my family owns a manufacturing unit. We were also into solar EPC which we discontinued. We have witnessed numerous instances where we had to pay hefty bribes in order to secure government projects. Nothing moves in India without bribes.
100000000% true,I personally believe that if one wants to run a successful business the environment is vital for the mental and physical health make sure your coworkers or your employees are working in a pleasant environment…..If the ceo wants to run a successful business make sure your employees or co workers are happy……ot forget about being a successful business person.
【回复】100000000%的真实，我个人认为，如果一个人想要经营一家成功的企业，环境是至关重要的，心理和身体健康可以确保你的同事或你的员工是在一个愉快的环境中工作... 如果CEO想要经营一个成功的企业，确保你的员工或同事是快乐的... 不要忘记做一个成功的商业人士。
Hu Shi Xiong
If the issue is bribes then it's not an issue with democracy .
There was a write up a few days ago. It mentioned of the hardship faced by returning NRIs to setup manufacturing in India.
- The sheer number of approvals needed.
The time consumed.
The amount of BRIBE Demanded. The greed of the Govt employees.
The mental harassment by the concerned Govt departments.
Neither the Govt employees nor the politicians have any inkling. How do we attract innovation.
We are left with Cronyism.
That's true. My dad and uncle qualified to apply for a green card. They declined the green card offer and returned home with capital to start manufacturing. They don't encourage us to follow the same path and sent us abroad.
In addition to all the problems you have mentioned cronyism is at its peak now which has already put a spanner in the supply chain and Foxconn has withdrawn. The way things are going India may be in the same boat as SriLanka and Pakistan.
Exactly what I am feeling. India is sooner rather than later going to become Pakistan and the difference between the rich and the poor is only going to increase.
You are over exaggerating. Foxconn only pulled out of a pact with Vedanta. Foxconn is expanding Smartphone manufacturing in India.
Could you please elaborate a little more on the ground reality, as in, what would be the problems faced by an Indian manufacturing startup?
Absolutely spot on. You have missed the ‘corrupt’ word, Clueless and corrupt Indian civil servants and politicians.
Not true anymore, ministry representatives are reaching out to businesses proactively to gather information and requesting inputs as per my own experience.
Top down approach. Great
I am waiting for some government at centre to offer you a Central ministry of commerce and industry. Seriously, I don't think the gravity of these two words can be fully understood by traditional neta like politicians. India needs an expert person for that. I have read many of your posts. Really, you represent those very few who have excellently transformative ideas for India, yet never denigrate India regarding its current positions/situations. You ooze positivity Sir, and India needs that.
Martin Graham Lives in The United States of America (1981–present)
It was/is an attempt to tie their economy to ours so if they decided to attack us they would suffer as a result.
If you wanted to eat a hamburger, where would you go?
Let’s suppose, for reasons of this discourse, you had the following options…
* McDonalds - You know what you are going to get. Not the best hamburger. But it is fast and it is cheap. And what your receive is reliable.
* Burger King - Also “fast food”. Also reliable. A better hamburger. But double the cost of McDonalds.
* White Castle - Also “fast food”. Very quick. Very cheap. But terribly greasy, and tiny.
* Superb Burger - A local burger joint. Each burger is handcrafted out of the best ingredients, and made to order. Slow service, and high price. But everyone goes to it because it is so very delicious.
* Joe’s Good Burger - A kind of shady, and shabby, cart situated in a back alley. Joe wears a dirty white apron. Smokes cigars. And hasn’t cleaned the cart in years. Prices are middle range.
* Shoney’s - They serve all sorts of dinners, or which includes an extensive hamburger menu. Nice surroundings. Medium prices, good burgers.
Which would you go to?
I am sure that you (the reader) has visited all of these places or similar ones, at one time or the other. So which one would you choose?
Well, it would depend on the situation.
If you were hungry, and in a rush, you would go to Joes.
If you only had a dollar or two, you would go to “White Castle” or McDonald’s.
If you wanted a good meal, and had the time and money; Shoney’s or Joe’s good Burger would be your preference.
Making products is quite similar to this. It is always a mix of quality / time / price.
But there is another factor that comes into play.
And this other factor has to do with the workers who run the burger places. If the workers are lazy and slovenly, you will not want to go there to eat. If they are coolly efficient and caring, you would be more prone to visit the establishment. But even more so, it would depend on the reputation. As this determines WHO runs the restaurant.
In the case of India, there have been many, many who have experienced “bad experiences” and have pledged never to use India ever again. This is simply not me making excuses, I personally know a number of companies that PLEDGED never, ever to use Indian factories ever again. The experiences were THAT painful.
It is more than quality. It is more than deceit. It is more than legal-sharks, and shady business-deals. It’s a systemic level of corruption that runs rampant throughout the entire Indian industrial infrastructure. To do business with India is to take risks, and many companies are unwilling to do so.
Chan Han Meng
Factories and manufacturing are about money, not politics. China works, India doesn't
It is true that India, as a democracy, is more in line with the "political philosophy" of the United States and other Western countries - tariffs and fines are just the usual "tools". For example, high tariffs on imported parts cost General Motors $588 million over 26 years, and Ford accumulated losses of more than $2 billion over 10 years, and both companies eventually withdrew from the Indian market.
But all this is child's play in the face of "retrospective taxes".
In 2007, mobile network operator giant Vodafone acquired a Cayman Islands-based investment company with a stake in India's Hutchinson Essar for $11 billion. The Indian government then demanded a capital gains tax of $2.9 billion from the acquisition.
2007年，移动网络运营商巨头沃达丰以110亿美元收购了一家总部位于开曼群岛的投资公司，该公司持有印度 Hutchinson Essar 公司的股份。印度政府随后要求从这笔收购中征收29亿美元的资本利得税。
At that time, the Supreme Court of India ruled that "the tax jurisdiction of the Government of India does not extend to the Cayman Islands". However, in 2012, the Indian Parliament passed an amendment to the tax law, stating that "the Government of India shall have the power to pursue all mergers and acquisitions from 1962 onwards if the physical assets are located in India". Under the amendment, 17 foreign companies were caught up in tax disputes.
In a move that left global investors stupefied, it was not until 2020, when the International Court of Arbitration in The Hague ruled that India's tax claims "violated fair treatment," that the Indian government made a cursory offer to settle with the foreign firms whose assets it had already confiscated, claiming that it would return a portion of the money, provided that they did not pursue further damages.
It is worth noting that India's controversial tax law amendment was not formally repealed until August 2021.
However, India does not stop there. Over the past decade, trade protectionism in India has taken on a new dimension in the face of the entry of foreign retail giant Walmart and e-commerce platform Amazon.
In order to protect local retailers, the Indian government has banned retailers from organizing time-limited discount campaigns and prohibited retailers from adopting their own suppliers and using only local Indian suppliers.
Price, who was the CEO of Walmart Asia, has said that Indian retailers do not need to comply with the same regulations, which makes it difficult for outsiders to make money. When it comes to the Indian government's standards for fostering small businesses, no one has the ability to follow the scale of production required by large retailers. Eventually, Walmart left India.
In 2020, about 2,000 local retailers in India filed antitrust lawsuits, and Amazon gradually pulled its e-commerce business out of India.
A total of 2,783 foreign companies with registered offices or subsidiaries in India closed their operations in the country between 2014 and November 2021.
List of penalties imposed on MNCs by the Government of India:
* Nokia, $256 million
* IBM, $860 million
* Wal-Mart, $1.35 billion
* Microsoft, Rs 7 billion
* Amazon, $172 million
* Google, $275 million
* Samsung, $212 million
* OPPO, $550 million
* vivo, $270 million
* Xiaomi, $680 million
This is because Indian culture is too odd, Indians don't talk about win-win or the so-called way of doing business. They think that as long as MNCs dare to come to India for development, it means MNCs are profitable. As long as MNCs invest in India, it means that the MNCs are willing to be subjected to high taxes as well as fines by the Indian government. As to whether MNCs can make money or not, whether they can survive in India or not, that is the problem of MNCs, the Indian government does not care.
An expert on India once said: "India lacks a culture of shame, you feel immoral things, in the eyes of the Indian is a very smart way to make money, all the fines are Indian rely on their own ability to get, why return you?"
However, Multinational corporations from the United States and other Western countries have made exponential returns on their investments in China. Tesla's factory in Shanghai directly catapulted Elon Musk to become the richest man in the world.
In 2008, Elon Musk revealed on twitter, "I put in all money I had, didn’t own a house & had to borrow money from friends to pay rent. Difficult time."
At that time, Elon Musk and Tesla were close to bankruptcy.
Elon Musk can't raise money on Wall Street, and banks in the U.S. and the West aren't willing to lend to him. It is the Chinese Bank that lends to Elon Musk, and the Shanghai Municipal Government vouches for him. Because Shanghai Municipal Government is bullish on Tesla's future prospects.
Tesla's share price gradually soared, and Tesla also got rid of the haze of bankruptcy.
Today, Tesla has a market value of more than $400 billion, making it the world's largest auto company by market value. The turnaround Tesla has not lived up to the expectations of the Shanghai Municipal Government and has become a proactive local taxpayer in Shanghai.
MNCs from the United States and other Western countries invest in India for the purpose of making profits, and if they cannot make profits, they may even face investment risks. So why are they investing in India? Investors and capitalists are not idiots.
Walmart & Amazon never left India though? Both of them still run the ecommerce business & with both of them still running sales & Amazon also planningto expand offline?
Same goes for Walmart. I do agree with the fact that these entities were asked to close their own proprietary vendors since they unfairly projected their own products over others & also because they had enormous capabilities to sustain losses in discounts and put ofhers out of business.
But still both these companies are or have not exited the market so I am not sure what your source of information is.
In democrazy USA they lie, cheat + steal & America attacked, bombed & killed hundreds thousands of people so pls stop bragging this evil democrazy OK
Indians don't have a normal way of thinking, they will always be a country of shit! There is no shame in Indians!
My bosses have worked with Indian groups. They can demand some pretty outrageous things such as handing over proprietary software and pushing Indian CEO’s onto the top of their company. I don’t think they are capable of raising up their own domestic companies so they have to find a way to seize them.
My company bought equipment from a company with Indian CEO. When we inform them of issues with the equipment, they were very unresponsive, and never try to solve the issue. Then, 1 year later, when we feedback on problems again, they were suddenly very responsive and keep on asking to service the equipment, after warranty over and we need to pay for every visit.
It was a very bad experience.
They seems to care more about making money then anything else, such as customer service or product reputation.
On the other hand, we also bought equipment from Chinese companies. They were very responsive to resolve issues. Seems like they cared very much about the products performance and reputation.
What is mine is mine. What is yours is also mine. 💰💃👯👫👬👭💃💃💃💃
India just don’t has a culture of attracting overseas business and their policies are not business friendly. Investor like banks before investing already suffered losses under court order to pay millions $ unknown taxes and compensations incentive. State to State policies and law are different and can change when political party took over government of the day , coupled with poor infrastructure and impoverished labour conditions could not attract overseas investors like China over past 40years and will remain so in distance futures ( 50 - 100 years ) .
India can be successful like China if their work with China and not with the west as history revealed India was slaved to the west not a partner.
Good luck to Foxconn. Just signed an agreement to Invest in India.
Actually , don't wish them good luck.
Whatever happens , they deserve it.
Just too much smelly “ cow “ dung in any business ! 😂
insufficient industrialized population for manufacturing industries to thrive, despite a population exceeding China. Those cow urine drinking religious populance do not count.