Rupesh Agarwal, I am a lot of things but an Engineer. That's just to afford being everythng else
How do we estimate the cost of a product? Salary of employees is a big part of it. But, there are other factors as well. And, it is a myth that Salary in India is lower than in China. Salary in China could be way lower in many many spaces, esp. Manufacturing.
Cost of a product depends upon the cost of raw materials, employee cost, infrastructure cost, transportation and hence energy cost, cost and ease of starting a business to name a few major factors.
Even if we assume that employee cost incl. salary in India is cheaper than in China (which is not), the other costs in India are so high that it becomes totally uneconomical to compete with Made in China products in terms of quality and cost.
Most of the raw materials for products that are cheaper when made in China, are readily available in China at a very good price quality index.
Transportation and Public Infrastructure
Public infrastructure in China is just super. Goods can be transported efficiently, on-time and across country at a much lower cost than in India. Indian manufacturers cannot rely on public infrastructure for reliable transportation. Most of these manufacturers have then to go to Private logistics providers or have some supply chain of their own. Imagine the cost of that?
Miscellaneous Business Cost (Starting and Running)
Cost and ease of starting a business. It is not easy in China either, but relatively easier and cost efficient. Bribery in China is too low, punishment when caught being too harsh. Bribery alone leads to a lot of un-accounted cost, ranging from customs to IT to Local police to licensing authority to getting a VAT number issued. Try starting a business and you will know what I mean. It is super crazy.
So, you can make your judgement.
Gaurav Singh, Sr Consultant CRM Practice at UST Global (2016-present)
There are many reason Chinese products are cheaper than Indian products like cheap labor, low tax levied on manufacturing industry, more efficient labor force but the most important reason then managed to sell products in India at the fraction of the cost because of dumping. Let me elaborate further on Dumping,
Dumping inimical method to sell your products in other geography with the intention of immiserate local industry, trenched them and mow down them for the benefit of your own industry. It other wards selling your products less then the cost of production, in loss to kill local industry.
China is notorious offender of dumping, this ensnare they have been using for many many years and Indian industry has no strategy to thwart the attack instigated by China. We also unabashed by all this and quotidian make purchase of Chinese products.
Recently Govt of India has imposed anti dumping duties on some Chinese products which make china miffed and thorny.
Goran Mekota, lived in India
Is there some data regarding statistical efficiency per a single worker? Even if he is payed 2x more but does 4x more work (because of better infrastructure, technology, organisation, work ethics or whatever) it is still cheaper.
Just making guesses here, but the impressions is that China is better organised for mass production and has a better trained work force. I seems to me that India has competitive higher education but lacks quality and reach in the basic one, which in turn makes it more competitive in highly skilled jobs (medicine, IT etc) than in mass-production that employs less educated workforce.
(besides the bureaucracy, transportation etc that are already mentioned in other answers and I'm unable to compare)
Sourav Datta, trying to look at the "Bigger Picture"
Its just a simple concept of Economics called Economies of Scale.
Once you have the infrastructure ready for mass production, the quantities produced is not proportional to cost anymore. The cost increases very less per additional quantity. Hence the cheaper price in China.
Aditya Pareek, former Software Engineer at Capgemini India (2012-2015)
In first 30 years of independence India and China had a similar growth pattern. Both India and China have put in place industrial policy in 1980s and 1990s, but in China Deng Xiaoping declared that it did not matter whether cat was black or white so long it caught mice. India had many more demands of industrial cat not just the simple business of catching mice. It should preferably a go nment owned, located in industrially backward area, be small scale in its operation and use indigenous mice catching technology as well as capital equipment. Inevitably, India hobbled in manufacturing sector while China becomes the worlds factory.
Shuo Yang, Coding peasant and civil economist
because India's infrastructure is very terrible and India is not business-friendly, which makes manufacturing expensive.
Vdhay Kumar N, B.E Mechanical Engineering & Construction, Bangalore University (2001)
For costing of any product includes design, raw materials, production cost, labour cost, transportation charges finally taxes at various stages.
In countries like india we tax raw materials double/ triple/ quadraple times plus service charges. with transportation the raw materials cost triples again service tax. Best example is oil and gas which doesn't cost beyond 1 Rupee is exaggerated to 72 rupees per liter. The number of hands we change that many times we pay service tax at 18% rate.
Man power is cheap in india as well as china and that is not a big concern as we get more automised rely on workers for quality reduces and rejections also reduce.
China is a co unist country which can impose its will to do on its people and discipline them with law. The mass production system they follow is reducing their cost. Since most companies are go nment owned even though they don't tax they get hugh profit to refund the go nment.
chinese go nment made many trade pacts with different countried to sell their products at lowest prices. And this the main reason for economic slowdown.
Slowing down the productivity will increase the cost of product so they dump every where around the world again and again.