Foxconn decides to open a $5 bn facility in Maharashtra, India. The two countries India and China are facing enormous political, economic, and military resentments. Xiaomi has already its phone assembly plant established in Andhra Pradesh, India where it will be announcing its new products, today. Huawei received the permission for operating in the networking gear factory.
Meanwhile, India and China are the world’s two popular nations, whereby India accuses China of the Maoist guerrillas –secret financing the Naxol. Both the countries have long-existing border-disputes.
What’s more interesting is the relative wages, demographics and labor availability in both these countries. The manufacturing center in China has consistently thrived on the extensive pool of cheap workers. This pool of workers mostly consisted of women travelled from various provinces to the Pearl River Delta. They plan to work in the factories that are mainly known to supply the world with a variety of manufacturing goods.
Nevertheless, China has looming demographic crisis due to its ‘one child’ policy that has functioned or more than two generations in the country. This policy coupled with increased longevity keeps working-aged people from tilting, which only mean each productive worker is wielding more and more long-living parents, retied and grandparents and even great-grandparents.
Owing to the increased demand for workers and static supply, the Chinese wages have been creeping in the country for a while.
On the contrary, India’s population has a median age of 27 (equivalency to 36.7 that of China). It has a huge supply of workers, including those from the scheduled castes.
Recently, the government gave approval to Huawei Technologies to set up the plant in India, albeit the facility needs a final approval from the ministry of commerce because it is a Chinese company.
Foxconn and the Indian government have struck a common ground to build an understanding of manufacturing a large electronics factory in the state of Andhra Pradesh. This project will be an investment of a total of $5 bn including the employment for at least 50,000 people after the mutual agreement is signed.