The India vs. China debate has become so boring. China is miles ahead of India when it comes to manufacturing while India leads in services. Companies such as IBM have smartly taken advantage of this situation by shifting manufacturing operations to China and services to India.
Strategies such as these are increasingly getting popular. And a report in the Wall Street Journal stresses why western companies need to get smart fast to tap the potential of India and China.
What companies such as IBM do in the coming years will have big implications for the chemicals industry. The Indian government is doing its best to boost chemical manufacturing but the big jump can take place only when downstream manufacturing takes off in the country. Industry accounts for just 27% of the Indian GDP compared with around 49% in the case of China.
In the absence of a big enough domestic market, India chemical producers will have to rely on exports. And developing a globally competitive cost position will be vital to their success.