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Car was just an example. It was true in all facets of like - TVs, toothbrush, soap, shampoo etc. etc. Why was it a barrier ? Because these were monopolies (or d
by dmode 10y ago
Car was just an example. It was true in all facets of like - TVs, toothbrush, soap, shampoo etc. etc. Why was it a barrier ? Because these were monopolies (or duopolies) with no incentive to innovate and invest capital. They did not have exports so they had no reason to expand manufacturing. They had no way to lower prices as they had to manufacture all the parts that went on to the car due to import restrictions. Resulting in high car prices that only the very rich can afford. Which in turn resulted in a small car market without the incentive to expand their capacity. If no business is expanding, there are no jobs to be had.
- kamaal 10y agoThe only problem is sure you can open up your economy, get cheap spare parts, and assemble them here. But what really happens is in this context. And especially if you are just starting out you really end up being somebody who is very good at assembling things, not really that good making them. This has to some extent happened with the software industry. While the services industries have done good. Product industries have suffered and continue to. What we really have in India are largely me too products from the Bay Area. You can open up your economy as much as your want but you will only get as far as your human resources are skilled and trained. Beyond that your human resources are now slave labor to a more powerful economy. There were plenty of debates during the last election. And all economist even the ones supporting the ruling party(Surjit Bhalla) were saying that last thing we want is to build Indian economy on the back of its laborer.