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Indian Factories Losing Out; Forced Labor Blacklist Grows

By Paul Berger

 

Workers at a garment factory in New Delhi, India. PHOTO: ANINDITO MUKHERJEE/BLOOMBERG

India is missing out on a potential boom in manufacturing, and it only has itself to blame. President-elect Trump’s threats of 60% tariffs on Chinese goods are a golden opportunity for India to lure U.S. companies to its network of factories and fast-growing economy. But India is punching below its manufacturing weight as factory owners battle endless regulations and strong labor unions, the WSJ’s Shan Li and Megha Mandavia write.

Some factory owners in India keep headcount below 100 workers to avoid the need for extra forms and licenses, while managers are tied up for hours with paperwork logging overtime and accidents. In some parts of the country, local laws bar women from working past 7 p.m., limiting factories to a single shift.

Prime Minister Narendra Modi has tried to loosen India’s laws and regulations, but his reforms have yet to be widely implemented after pushback from labor unions.

The frustrations are pushing more Indian retailers and manufacturers to look across the border to Bangladesh where a streamlined regulatory process and lower labor costs help factories to produce and ship orders twice as fast. That has led to a slowdown in Indian manufacturing and a sharp jump in India's apparel imports.

  • Unilever says it is putting India at the center of its new business strategy. (WSJ)
 

 

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Quotable

“The geopolitical environment has become less favorable, with growing threats to free trade from all corners of the world.”

— Christine Lagarde, president of the European Central Bank
 

Government & Regulation

The Audi booth at last year’s Auto Shanghai show in China. PHOTO: ALY SONG/REUTERS

The United States is adding almost 30 Chinese companies to its forced labor blacklist, piling more risks and complications onto global supply chains. The WSJ’s Richard Vanderford reports that goods from more than 100 companies are now barred from the U.S. because of alleged links to Uyghur mistreatment in China’s Xinjiang region. That means importers are having to dig deeper into supply chains to figure out if finished goods or parts contain materials from a region that produces items ranging from cotton to solar-panel components. Identifying the items isn’t easy. Thousands of Volkswagen’s Audi, Porsche, Bentley and Lamborghini cars were held at U.S. seaports earlier this year after they were found to contain a magnetic component sourced from a blacklisted sub-supplier in Xinjiang. The latest companies to be banned are in sectors such as agriculture, mining and battery supply chains.

 

Number of the Day

$2.71

Average price per kilo for airfreight transport from Europe to the Americas for the week of Nov. 11, up 10% from the previous week and 23% higher than the same week last year, according to WorldACD.

 

In Other News

U.S. consumer sentiment rose following Donald Trump’s election victory. (WSJ)

Eurozone business activity declined and the euro fell to a near two-year low against the U.S. dollar. (WSJ)

U.K. retail sales slipped 0.7% in October. (WSJ)

Japan approved an economic stimulus package worth more than $140 billion. (WSJ)

Retail sales in Canada rose for a fourth consecutive month. (WSJ)

The chief executive of Swedish battery maker Northvolt stepped down as the company entered U.S. bankruptcy. (WSJ)

German car-parts supplier Robert Bosch plans to cut thousands of jobs because of a slowdown across the automotive sector. (WSJ)

Roadrunner Transportation Systems is refocusing on its core less-than-truckload business and scoping out acquisitions. (WSJ)

The Teamsters union praised President-elect Donald Trump’s selection of pro-union Republican, Lori Chavez-DeRemer, as his nominee to lead the Labor Department. (WSJ)

A strike that has effectively shut down Canada’s postal system shows no signs of reaching a settlement. (WSJ)

Some major LTL carriers are seeking mid- to upper-single-digit rate increases for 2025. (Journal of Commerce)

Mexico is investing more than $3 billion to expand the Port of Manzanillo. (Splash 247)

Russia is estimated to have supplied North Korea with more than a million barrels of oil since March in violation of UN sanctions, according to a research group. (BBC News)

A company is testing autonomous drones on islands off the Scottish coast to see if they can provide logistics support to remote areas. (Cargo Facts)

A Portuguese airline grounded a passenger plane after discovering 132 hamsters had escaped from cages in the cargo hold. (CBS News)

A DHL cargo plane flying from Germany to Lithuania crashed near Vilnius airport, killing one person and injuring three others.

 

About Us

Paul Page is editor of WSJ Logistics Report. Reach him at paul.page@wsj.com.

Follow the WSJ Logistics Report team: @PaulPage, @bylizyoung and @pdberger. Follow the WSJ Logistics Report on X at @WSJLogistics.

 
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