Why prominent American companies should shift manufacturing to India as soon as possible
As you are well aware, most of the goods we use in our daily lives are manufactured from China. This is a no brainer, as China is extremely cheap to manufacture products. In fact, China’s linenace towards prominent American companies is one of the reasons for their immense success. Take for example Apple, one of the most respected brands in American society and the first trillion dollar company ever. This success can be credited for a numerous number of reasons such as their unique innovation, excellent advertising, and outstanding customer service. However, the reality is that Apple manufactures all their technology in China, allowing them to save billions of dollars which they can reinvest. If they were to manufacture products in another region, they may not have had the same success, as manufacturing is significantly more expensive and time consuming. So why am I saying that American companies should shift manufacturing to India? It is due to US-China relations at an all time low as a result of the Coronavirus pandemic. It seems highly likely that the two dominant nations enter a prolonged cold war. Each country is going back and forth at each other to send a message to their opponent. The US banned a popular app called TikTok and closed down a Chinese embassy in Houston, while China responded by shutting down a US consulate in Beijing. These two nations will continue to quarrel, and I say American companies should look elsewhere to manufacture their products before it is too late. If China legalizes a ban on all American products, it will be very chaotic for many companies since they all will be srambling to find a new home for manafacturing. This will result in loads of lost revenue and a shortage in products, which is why I am advising them to look for an alternative now and plan for the worst. Manufacturing in India would be a wise choice, and I believe companies will not lose anything, but actually gain advantages which will help them in the long term. First of all, India has exceptional relations with the US. They have always been allies, and the future of the strong relationship between these two countries seems more optimistic than ever before. Prime Minister Modi is known for having a great relationship with President Trump and Former President Barack Obama. India is also a democracy, meaning they are rather trustworthy with the chances of them spying being significantly less compared to China’s unpredictable government. India is also quite cheap to manufacture and assemble products, a huge misunderstanding by many market analysts and economists. It may not be as affordable as China due to India’s higher tax rate, but it is still decently profitable where multi-billion dollar companies can benefit greatly. The country also has a significant number of people who are unemployed, so finding sufficient employees for factory jobs will not be a problem at all. The average wage in India is very low, so companies can cuts costs but not efficiency. From my perspective, not only would American companies succeed, but India as a nation will see a sudden boost in GDP and a better economy as more citizens will be employed. Since this will benefit both sides of the equation, India and US companies should take drastic measures to finalize an optimum solution.