Domestic outsourcing
There has been a legislation in US against outsourcing. Indian company's have been crying foul and there is a media circus in India about how it will affect jobs.
To start with I do not think there will be a time that any country can stop outsourcing unless they want to make their industry weaker and less competitive. Also as businesses in US start recovering they will need to save costs which automatically will mean outsourcing. The labour market in US is cheap enough to build facilities in US but it is still not cheap enough. Will the US market be willing to absorb the increase in costs.
US has forgotten that it all started when they lost the manufacturing base first to Japan, then to south east asian company and now to China. US economy would do better if US passed legislation that every year American superstores like Walmart will need to sell atleast 5% more American made products. All the tax credit given by the obama government has gone in shopping for cheap chinese products and done nothing to the US economy.
The same should be done by India. India has a good domestic consumption and the chinese know that this the next market for them to tap. In India we should make sure that our reliance to cheap imports are cut down. For example every 2 in 10 mobiles sold in India should be manufactured in India. Nokia and Samsung is already manufacturing successfully and the other players should also be made to do so. We should set up large industrial zones which would have feeder industry rather than the in-conceived small scale SEZ.
I am not advocating protectionism for Indian or US industry but advocating a robust domestic supply and demand.
To start with I do not think there will be a time that any country can stop outsourcing unless they want to make their industry weaker and less competitive. Also as businesses in US start recovering they will need to save costs which automatically will mean outsourcing. The labour market in US is cheap enough to build facilities in US but it is still not cheap enough. Will the US market be willing to absorb the increase in costs.
US has forgotten that it all started when they lost the manufacturing base first to Japan, then to south east asian company and now to China. US economy would do better if US passed legislation that every year American superstores like Walmart will need to sell atleast 5% more American made products. All the tax credit given by the obama government has gone in shopping for cheap chinese products and done nothing to the US economy.
The same should be done by India. India has a good domestic consumption and the chinese know that this the next market for them to tap. In India we should make sure that our reliance to cheap imports are cut down. For example every 2 in 10 mobiles sold in India should be manufactured in India. Nokia and Samsung is already manufacturing successfully and the other players should also be made to do so. We should set up large industrial zones which would have feeder industry rather than the in-conceived small scale SEZ.
I am not advocating protectionism for Indian or US industry but advocating a robust domestic supply and demand.
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