Search interesting materials

Saturday, May 06, 2006

How bad are Indian ports, and how badly does it matter?

Everyone in India is envious of the labour-intensive, export-oriented manufacturing exporft of China. The gap between India and China is caused by 4 problems: Small scale sector reservation, labour law, lack of GST and superior Chinese infrastructure.

I recently came across some striking data which suggests that Chinese ports are roughly as bad as ours. I wrote an opinion piece in Business Standard on these issues. On one hand, this raises questions about the port reforms in India - we haven't yet obtained low-cost ports by world standards.

But equally, this makes one question the importance of infrastructure as the explanation of why India lags China on manufacturing exports. Perhaps the other 3 problems are more important. You wouldn't start a factory with 100,000 employees with Indian-style labour law, which critically impedes the economies of scale that are attainable in India.

No comments:

Post a Comment

Please note: Comments are moderated. Only civilised conversation is permitted on this blog. Criticism is perfectly okay; uncivilised language is not. We delete any comment which is spam, has personal attacks against anyone, or uses foul language. We delete any comment which does not contribute to the intellectual discussion about the blog article in question.

LaTeX mathematics works. This means that if you want to say $10 you have to say \$10.