Can exports drive chemicals demand?

It is encouraging to read that Samsung Electronics is setting up a major export hub in India. A new plant, its second in India, is being built to produce 1.5m colour TV sets, 200 000 LCD Tvs and 300 000 LCD monitors with output targeted at Europe, the US and the Middle East. Currently, China is Samsung’s largest export hub where it has six manufacturing plants.

India’s consumption of most major chemicals is at least 4-5 times behind China and this is partly to do with China’s dominance in global trade. A rapid consumption growth is possible only if manufacturing in electronics and other industries migrates to India.

Will more companies follow Samsung? I think the process started a few years back though momentum has yet to build up. The process is likely to be slow and India faces stiff competition from Vietnam and other low cost destinations around the world.

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One Response to Can exports drive chemicals demand?

  1. john richardson 16 July, 2007 at 5:21 am #

    This serves as a reminder that while there is a lot of talk about India’s economic boom, local chemicals consumption is relatively very small.
    Politics and poor infrastructure are still holding India back.
    Should India bother at all? Can it ever have a comparative advantage over China in manufacturing?

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