Multiple choice

Which of the following would sum up the prevailing situation in Indian manufacturing sector?

Passage:
Vedanta Metals has emerged as a paragon of productivity improvement in the last decade. The company, in a bid to become globally competitive, has launched ambitious employee productivity programs during the period. The results are there for all to see. In spite of these improvements, the productivity of an average factory worker in India is currently less than one-third of the productivity of a worker in China, or in the USA.
However, what India lacks in terms of productivity, is compensated to some extent by the availability of cheap labor in the country. That, and the fact that most Indians study English as a language during their schooling, and a large majority of Indians know enough English to understand instructions in the language, makes the country an attractive destination for foreign investors looking to diversify their manufacturing base in order to reduce dependence on a single supplier in China or elsewhere.
Many companies are increasingly wary of doing business with Chinese companies because of the abuse of intellectual property in the country. The fact that the industries are run under the direct, or indirect, control of the government makes it hard to press charges against the Chinese in cases of industrial espionage. The case of AMSC suing the Chinese company, and one time partner, Sinovel, for theft of proprietary software is a case in point. The fact that the Chinese courts have dismissed the case has caused even more anxiety among manufacturers partnering China. On the other hand, the dismissal of a case, by the Indian apex court, which the government of India had filed against Vodafone, an MNC, has cheered many about the neutrality of the Indian judicial system.
India has a huge domestic market, and research has shown that consumer demand in India is expected to treble in the next twenty years, thanks to rising incomes. For manufacturers, this is a godsend opportunity to tap the growing domestic demand. An investment now will position them favorably to benefit from the coming boom in the domestic demand. That India has a huge talent pool of engineers in practically every stream makes it attractive to manufacturers like Nissan, who are setting up plants in the nation, and plan to use the nation as an export hub.

  1. Playing a catch-up game with the rest of the world

  2. Competing directly with Chinese manufacturing sector

  3. Poised on the brink of a great precipice

  4. Readying to make a much greater contribution in future

  5. Emerging as an export hub
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

(1) Incorrect. 'Rest of the world' is a bit extreme considering that only China (and US in a limited reference) has been mentioned in the given context.

(2) Incorrect. Although the passage mentions how India is emerging as a preferred manufacturing hub, it does not support India rising as a challenge to China. Many companies are using India as an insurance policy against disruption of supplies from vendors in other countries.
(3) Incorrect. A precipice would mean being on the edge of a great fall.
(4) Correct. Because demand is expected to treble in the next two decades, and because the nation is emerging as a manufacturing and export hub, the option can be inferred. Refer last Para.
(5) Incorrect. Only Nissan is mentioned as setting up facilities in India that will serve as an export hub. The domestic demand is stressed more in the passage.

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