How labour regulations affect manufacturing in India4 min read 13 Mar 2018, 11:17 AM IST
There is considerable evidence that restrictive labour regulations have prevented India from reaping the full potential benefits of opening up the economy
The Narendra Modi government’s recent doubling of duties on imports of beauty aids, watches, toys, furniture, footwear, and, surprisingly, kites and candles shows India’s lack of competitiveness even in these entry-level labour-intensive industries. Also, a similar recent doubling of import duties on electronics, including related inputs and parts, is an admission by the government of the country’s lack of competence in the highly labour-intensive, low-skilled and repetitive tasks of processing or assembling duty-exempt imported inputs to produce and export finished mobile phones and TVs. And, in textiles and apparel exports, India is now being outperformed not only by China but also by Bangladesh and Vietnam.
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