Splurgenxs
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Do u really need to ask tht ...there all dimwits.Talk about being obsessed.
ppl need to stop responding to Chinese twerps.
Rupee drops almost 30% in 8 months
- Thread starter laman12345
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Do u really need to ask tht ...there all dimwits.Talk about being obsessed.
ppl need to stop responding to Chinese twerps.
Yeti
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laman12345
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Sorry to tell you bad news. Rupee drops back to 55.5 today (almost Historically Low)
USD INR Chart | Dollar Indian Rupee Real Time Chart
dearone4u_22
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India Wages and Currency Beckon Manufacturers from China | 2point6billion.com - Foreign Direct Investment in Asia
U.S.-India bilateral trade now same level as U.S.-China trade in 1997 and increasing
Op-Ed Commentary: Chris Devonshire-Ellis
Jun. 1 India is beginning to look increasingly attractive as a destination for foreign investors as concerns over a lack of reform direction in China, coupled with increasing labor costs and a strengthening RMB position are placing some China based businesses under financial pressures. This was a point made earlier this week by Davide Cucino, president of the European Union Chamber of Commerce in China in its annual report citing that 20 percent of its member companies surveyed said they were considering exiting the China market.
The issue with China is that the business model it offered foreign investors 10-20 years ago has now changed. Chinas population is aging, its workforce is shrinking, and it needs more money to sustain its citizens. Even up to a decade ago, a Chinese worker could be hired for a little over US$100 a month, and hed be happy with that, a couple of beers and some cigarettes. But as the demographics of age have kicked in, the average Chinese worker is now both older, and as a result, has more responsibilities; hes now married, has a child, dependents in the shape of two sets of parents to look after, as well as needing money for future education and a mortgage for his family to live in a house. It is this simple reason why China has gotten more pricey, and those labor costs have risen to keep pace with his needs.
The implications of this are two fold; firstly, Chinese labor is becoming increasingly expensive, as is mandatory welfare and associated employment costs. When compared to the rest of Asia, China has the third highest labor costs throughout the emerging Asia region.
This means that if your business model requires cheap labor, and is not especially concerned about selling to the China market, then China is going to become increasingly unviable as a location to have your manufacturing or production facility. This would apparently account for the 20 percent of EU companies suggesting they wanted to exit China. However, the flip side to the increasing age and wealth of the Chinese population is that as a nation of consumers, the Chinese market is growing and has increasing amounts of disposable income to spend. If your business model supports selling to the Chinese consumer, then you would be part of the 63 percent of EU companies in the same report that indicated they would be expanding operations in China.
But for that 20 percent, what are the options? Interestingly, India looks increasingly likely to be the answer. Unlike China, India is getting reforms into place, and is opening up its markets. It has a large and cheaply available workforce, and the rupee is relatively low against the U.S. dollar and Euro. Just the currency situation alone means your dollar value goes further in India, whereas in China it is diminishing. India in fact has been making considerable progress bilateral trade with the EU reached a record high of US$110 billion last year, an increase of 22 percent. Of that, exports from India to the EU also increased demonstrating that even with the difficulties in the European markets, firms there are buying more Indian manufactured products.
Its the same story regarding Indian trade with the United States. Last years bilateral trade reached a new high of US$57.8 billion, an increase of 19.88 percent according to the Indian Embassy in Washington. Of that, Indian exports increased faster than U.S. imports, suggesting again that the U.S. desire for cheaper products is shifting from a China base to an Indian one.
To put this into context, and to measure the level of bilateral trade between the United States and China and the United States and India today, the current level of bilateral trade between the United States and India now is about the same as the level between the United States and China in 1997, at the time of the handover of Hong Kong. As we have seen, trade levels can increase dramatically in the space of a decade, and the same is likely to happen in India, especially given the population and worker age demographics.
The sectors today that are attracting the highest volume of trade between the EU and India are below, in order:
Textiles (17.9%)
Precious stones & metals (16%)
Pharmaceutical products (10%)
Mineral fuel, oil (7.9%)
Lac, gums, resins (6.3%)
Organic chemicals (6.1%)
Machinery (5.6%)
Electrical machinery ( 4.4%)
Clearly, if your business is involved in these sectors then India is a market to now seriously consider. But what of the wages and welfare costs? The new issue of our India Briefing Magazine covers payroll, salaries and welfare costs in India. It is currently available online as a complimentary download for a limited time, and its content makes for interesting reading.
In it, we compare the salaries and welfare of employees in eight Indian cities, including Delhi, Mumbai and Bangalore, in addition to fast industrial developing areas such as Gurgaon and Pune.
The findings are broken down into a full sub section of salary and welfare components. In it, we discuss welfare and other payments in detail and find that these are significantly lower than when compared to China. Although basic wages in China and India are becoming comparable, the difference lies in the social insurance costs. In China, where government policy has seen average wages increases of between 15 percent to 20 percent annually the past few years, plus a high rate of mandatory welfare contributions regularly reaching an equivalent of roughly 50 percent of the actual salary, in India these add-ons are far less of a burden. The difference is striking, and now in times of economic austerity, well-worth considering. The magazine goes into some detail as concerns costs of Indian staff.
We also covered a direct cost comparison between China, India and Vietnam in terms of relocating an entire factory from China. In it, we found that a combination of land and labor costs, when looking at the operational cost differences between a factory of 300 people, were about four times more expensive in China than in Vietnam, and a whopping eight times more expensive in China than in India. Although the comparison cannot be considered exact as individual businesses differ so much, these are large enough differences at face value to begin to make it worthwhile for CFOs to sharpen pencils and start to look more closely at the costs of business across Asia as concerns alternatives to China.
India may indeed seem somewhat exotic, and perhaps even difficult as a destination for business, but dont be fooled. I personally have conducted business in both for the past six years, and I am often asked about this. My reply is the frustrations are different but the outcome is the same. Essentially that means that if you can deal with running a business in China, India isnt going to be any harder, just different.
China remains an excellent market in terms of foreign businesses approaching it for its increasing consumer wealth. However, for companies that need to continue with low-cost, export-driven manufacturing, India is now a key destination. And with a low rupee, English language abilities, and policies that are opening up market sectors for foreign investment, the time to take a long look at the cost dynamics of establishing operations in the country are now ripe.
Chris Devonshire-Ellis is the founding partner of Dezan Shira & Associates. Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asias most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
U.S.-India bilateral trade now same level as U.S.-China trade in 1997 and increasing
Op-Ed Commentary: Chris Devonshire-Ellis
Jun. 1 India is beginning to look increasingly attractive as a destination for foreign investors as concerns over a lack of reform direction in China, coupled with increasing labor costs and a strengthening RMB position are placing some China based businesses under financial pressures. This was a point made earlier this week by Davide Cucino, president of the European Union Chamber of Commerce in China in its annual report citing that 20 percent of its member companies surveyed said they were considering exiting the China market.
The issue with China is that the business model it offered foreign investors 10-20 years ago has now changed. Chinas population is aging, its workforce is shrinking, and it needs more money to sustain its citizens. Even up to a decade ago, a Chinese worker could be hired for a little over US$100 a month, and hed be happy with that, a couple of beers and some cigarettes. But as the demographics of age have kicked in, the average Chinese worker is now both older, and as a result, has more responsibilities; hes now married, has a child, dependents in the shape of two sets of parents to look after, as well as needing money for future education and a mortgage for his family to live in a house. It is this simple reason why China has gotten more pricey, and those labor costs have risen to keep pace with his needs.
The implications of this are two fold; firstly, Chinese labor is becoming increasingly expensive, as is mandatory welfare and associated employment costs. When compared to the rest of Asia, China has the third highest labor costs throughout the emerging Asia region.
This means that if your business model requires cheap labor, and is not especially concerned about selling to the China market, then China is going to become increasingly unviable as a location to have your manufacturing or production facility. This would apparently account for the 20 percent of EU companies suggesting they wanted to exit China. However, the flip side to the increasing age and wealth of the Chinese population is that as a nation of consumers, the Chinese market is growing and has increasing amounts of disposable income to spend. If your business model supports selling to the Chinese consumer, then you would be part of the 63 percent of EU companies in the same report that indicated they would be expanding operations in China.
But for that 20 percent, what are the options? Interestingly, India looks increasingly likely to be the answer. Unlike China, India is getting reforms into place, and is opening up its markets. It has a large and cheaply available workforce, and the rupee is relatively low against the U.S. dollar and Euro. Just the currency situation alone means your dollar value goes further in India, whereas in China it is diminishing. India in fact has been making considerable progress bilateral trade with the EU reached a record high of US$110 billion last year, an increase of 22 percent. Of that, exports from India to the EU also increased demonstrating that even with the difficulties in the European markets, firms there are buying more Indian manufactured products.
Its the same story regarding Indian trade with the United States. Last years bilateral trade reached a new high of US$57.8 billion, an increase of 19.88 percent according to the Indian Embassy in Washington. Of that, Indian exports increased faster than U.S. imports, suggesting again that the U.S. desire for cheaper products is shifting from a China base to an Indian one.
To put this into context, and to measure the level of bilateral trade between the United States and China and the United States and India today, the current level of bilateral trade between the United States and India now is about the same as the level between the United States and China in 1997, at the time of the handover of Hong Kong. As we have seen, trade levels can increase dramatically in the space of a decade, and the same is likely to happen in India, especially given the population and worker age demographics.
The sectors today that are attracting the highest volume of trade between the EU and India are below, in order:
Textiles (17.9%)
Precious stones & metals (16%)
Pharmaceutical products (10%)
Mineral fuel, oil (7.9%)
Lac, gums, resins (6.3%)
Organic chemicals (6.1%)
Machinery (5.6%)
Electrical machinery ( 4.4%)
Clearly, if your business is involved in these sectors then India is a market to now seriously consider. But what of the wages and welfare costs? The new issue of our India Briefing Magazine covers payroll, salaries and welfare costs in India. It is currently available online as a complimentary download for a limited time, and its content makes for interesting reading.
In it, we compare the salaries and welfare of employees in eight Indian cities, including Delhi, Mumbai and Bangalore, in addition to fast industrial developing areas such as Gurgaon and Pune.
The findings are broken down into a full sub section of salary and welfare components. In it, we discuss welfare and other payments in detail and find that these are significantly lower than when compared to China. Although basic wages in China and India are becoming comparable, the difference lies in the social insurance costs. In China, where government policy has seen average wages increases of between 15 percent to 20 percent annually the past few years, plus a high rate of mandatory welfare contributions regularly reaching an equivalent of roughly 50 percent of the actual salary, in India these add-ons are far less of a burden. The difference is striking, and now in times of economic austerity, well-worth considering. The magazine goes into some detail as concerns costs of Indian staff.
We also covered a direct cost comparison between China, India and Vietnam in terms of relocating an entire factory from China. In it, we found that a combination of land and labor costs, when looking at the operational cost differences between a factory of 300 people, were about four times more expensive in China than in Vietnam, and a whopping eight times more expensive in China than in India. Although the comparison cannot be considered exact as individual businesses differ so much, these are large enough differences at face value to begin to make it worthwhile for CFOs to sharpen pencils and start to look more closely at the costs of business across Asia as concerns alternatives to China.
India may indeed seem somewhat exotic, and perhaps even difficult as a destination for business, but dont be fooled. I personally have conducted business in both for the past six years, and I am often asked about this. My reply is the frustrations are different but the outcome is the same. Essentially that means that if you can deal with running a business in China, India isnt going to be any harder, just different.
China remains an excellent market in terms of foreign businesses approaching it for its increasing consumer wealth. However, for companies that need to continue with low-cost, export-driven manufacturing, India is now a key destination. And with a low rupee, English language abilities, and policies that are opening up market sectors for foreign investment, the time to take a long look at the cost dynamics of establishing operations in the country are now ripe.
Chris Devonshire-Ellis is the founding partner of Dezan Shira & Associates. Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asias most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
Yeti
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laman12345
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Rupee falling too. sorry I just tell the truth
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