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Old January 6, 2008, 02:46 PM
Ankesh's Avatar
Ankesh Ankesh is offline
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Join Date: Sep 2006
Location: Mumbai, India
Posts: 689
Default Re: Money Making Opportunities in India

Hi Glenn,

Thanks.

>I was curious as to why chinese goods are getting cheaper than Indian stuff.

Two reasons.

i. The currency. Indian rupee appreciated a lot against the $. (Not sure about the Chinese Yuan's performance against the $...)

ii. Economies of Scale & Specialization. I've heard that China has entire villages whose only job is to make socks or to make t-shirts or to make lightbulbs. They've taken things to a whole another scale.

One example: a cousin of mine went to a Honk Kong trade show some time back. And inquired about batteries (the type that go inside watches). When he asked for samples, one Chinese company asked: would a sample of 1000 batteries be ok?

You ask the same question to other companies anywhere else in the world - and you would probably get a sample of 20-50 batteries - if that.

--

>Land. With so many people I thought all the land was pretty tied up. I've
>been reading about how local and regional India governments are RE-Zoning
>and taking land away from peasant farmers.

>Just to make room to build some light industry - to bring in cash.

>Are you saying the farmer land owners are moving to the city and selling
>their land?

Indian cities are insanely populated. Villages still have lower density.

People from villages are moving to cities because of better machinery and equipment. You don't need as many hands to work on the farm as before with modern machines.

And also, birth rates are higher in villages than cities too. So a farmer with 5 kids will send 2-3 to the cities to earn a better living.

But the farmer usually won't sell the land to convert his farm into something else.

The government has taken away land for building expressways and airports and paid very nominal below the market rates for them.

And they've also taken away land to create SEZ (special economic zones where businesses receive tax concessions). But I think they pay market rates for the SEZ land as they can rent them out to other businesses very easily (although I'm not 100% sure on it).
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