Ellora Time's Manufacturing Woes

Ellora and the Patels were not the only ones to succumb to the pressure from Chinese imports. Many manufacturing units in India had to close shop because they could not withstand competition from the extremely cheap Chinese imports. A leading manufacturer of fans, Ortem, closed its manufacturing unit in Delhi after it decided to rely on imports.

Many other companies including consumer electronics major BPL had to either cut back production or sell at prices below the cost of production. Another company manufacturing fans, T-Series closed its plant in Noida, Uttar Pradesh after it realized that it could not compete with Chinese imports.

Due to the favorable manufacturing environment, China's growth rate was almost double that of India's during the period 1980-2000. Also, the country attracted higher direct foreign investment than India. China's export volumes were easily five times those of India's and around 40% of these exports were products of multinational companies operating in China.

China's superior performance however was not only due to cheap labour, high productivity and government subsidy issues. It was widely accepted that Chinese firms were often 'ready to try illegal methods to capture a market.'..