​​​​​​​Can Indian Manufacturing Be the Next Chinese Manufacturing?

Courtesy of The Atlantic.

The country has quietly become the world’s sixth-biggest auto producer. But it’ll need to do better if it’s to join the top tier of global powers.

Not long ago, India’s underwhelming manufacturing industry was symbolized by its best-known car: the Ambassador. Modeled on a British car from the ‘50s, the boxy Hindustan Motors sedan dominated Indian roads for decades. Well into the 1990s, it was to India what the Lada was to the Soviet Union or the Trabant to East Germany, testimony to the technological shortcomings of an economy cut off from the world and shaped more by bureaucrats than by market forces.

Manufacturing in India still faces problems, including poor infrastructure, red tape, disconnectedness from global supply chains, and restrictive labor laws that have stymied the growth of business and limited economic dynamism. Nonetheless, over the past decade, hardly noticed by much of the world, the country’s auto industry has quietly scripted a success story. The land of the clunky Ambassador now houses one of the world’s major automobile industries. In terms of output—nearly 3.8 million cars a year, according to the most recent figures—India now nearly matches South Korea, an automobile powerhouse, and is on track to catch up with Germany.

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