Question

What are the advantages to foreign companies in setting up production in India?

Answer 1

Foreign companies gain many advantages in setting up production in India. Foremost amongst these is cheap labour. The population boom in India has led to large scale unemployment, as a result, a worker’s worth in India is lesser because one worker can easily replace another. This also accounts for lower wages. Due to the workers’ vulnerability, companies cut production costs by lowering work conditions and increasing work hours. This trend is unfortunate because it has led to disasters like the Bhopal Gas Tragedy of 1984. However, availability of cheap labour is a chief advantage for foreign companies in setting up production in India.