In a joint study conducted by Assocham-Roland Berger Strategy Consultants it has been stated that India’s cost competitiveness in manufacturing vis-a-vis Europe may decline to 30 per cent by 2023 from the current level of about 44 per cent on account of growing labour costs. This is not a good news for the country who wants to be manufacturing powerhouse in the next decade. India has primarily been seen as a country with many advantages that European counterparts fail to provide.
The study states that manufacturing in India is currently 15 per cent cheaper than Europe, but the cost difference is reducing due to increasing wages and other costs in India. By 2023, India is expected to still be 30 per cent cheaper than Europe.
The central government is coming up with different measures to encourage electronics manufacturing in this country and the study states that there is a need to encourage industry-academia collaborations to understand innovation requirements better. Besides, funds should be attracted from the private sector to support research at academic and research and development (R&D) institutions.
What India right now needs is availability of skilled work force and basic infrastructure facilities and this can happen by opening research and development centres at small towns and cities across the country.
By Atanu Kumar Das
