India sees stirrings of industrial renaissance

India has cultivated an image as a center for outsourcing, creating a new economy of call centers and software campuses that has lifted the relatively privileged. And even though workers here have for years stitched clothing and apparel, a widespread manufacturing base has been elusive, and factories have long been conspicuous for their relative absence here.

So the new murmurings of manufacturing could have a profound effect for a vast number of India’s poor people, as well as for the international sourcing of goods from cars to bras.

For decades, manufacturing in India has been hobbled by old labor laws, creaking infrastructure and paperwork. But for many of the three-quarters of Indians with less than a middle-school education, few factories has meant few jobs.

Across India, total exports—mostly manufactured goods—are rising at an annual clip of 26 per cent, according to Commerce Ministry. The manufacturing sector is growing at 9.4 per cent annually, compared with 6 per cent a year from 1991 to 2004, according to the Finance Ministry.

Special economic zones, the model that helped jump-start China’s export-led industrialisation, are now spreading here, providing tax holidays, less regulation and more control over infrastructure like water and power.

Nokia recently erected a high-volume factory in Tamil Nadu that it says will produce more than 30 million phones a year and account for at least one-tenth of its global output.

Hyundai Motor, which produces cars in Tamil Nadu, has made India its global hub for the Santro hatchback.

‘‘Geographically, it’s close to the market, and the second thing is the very highly educated people in India,’’ said Heung Soo Lheem, chief of India operations for Hyundai, explaining why his company had invested in the country.

The industrial gold rush is being fueled by multinational companies like Bayerische Motoren Werke, General Motors and Intel, which are snapping up real estate in Tamil Nadu.

It is hard to say how many jobs the boom has spawned. But recent government statistics show that auto plants and associated industries alone employ more than 10 million people—exceeding the entire worker population of Indian factories in the 1990’s.

India’s emergence as a manufacturing hub comes as multinationals look for alternatives to China.

Indian wages are also relatively low, beginning at about $2 a day for factory jobs. That compares with a minimum of $3.50 to $4.50 a day in Thailand, and $4 to $8 a day for some Chinese workers.Experts say the two countries will occupy different positions in the vast market for offshore manufacturing.

ANAND GIRIDHARADAS