Monthly Labor Review • May 2010 3

Manufacturing in India

Jessica R. Sincavage, 

Carl Haub, 

and O.P. Sharma

Labor costs in India’s organized 

manufacturing sector

Compensation costs in India’s organized manufacturing sector 

were 91 cents per hour for all employees in 2005; this amounted to 

about 3 percent of hourly labor costs in the U.S. manufacturing sector, 

but was above BLS estimates of labor costs in China

Jessica R. Sincavage is a 

supervisory economist in 

the Division of International Labor Comparisons, Bureau of Labor 

Statistics; Carl Haub is 

a senior demographer 

and the Conrad Taeuber 

Chair of Information at 

the Population Reference 

Bureau; and O.P. Sharma is 

the former Deputy Director of Census Operations 

in India. Email: sincavage.jessica@bls.gov or 

chaub@prb.org

I

ndia’s important role in the global economy is perhaps best exemplified by its 

membership in the G-20, the group 

that has replaced the G-8 as the major 

international economic forum. Although 

India is the fourth-largest economy in the 

world, accounting for 4.6 percent of the 

world’s GDP, the value of India’s exports 

in 2007 was only 1 percent of the world’s 

total exports.1 Many factors affect the level 

of a country’s exports and the growth of its 

GDP. The Government of India’s National 

Manufacturing Competitiveness Council 

has identified manufacturing as “the main 

engine for economic growth and creation 

of wealth” for the country.2 Currently, the 

Council believes that India’s export levels 

are far below its potential. India has been 

identified as a potential manufacturing giant by outsiders, as well, and has generated 

interest in the global marketplace because 

of its low cost of labor and large population. 

Because of India’s economic prominence, 

and in light of BLS’s history of providing 

comparative statistics, BLS has undertaken 

a research project to study the manufacturing industry in India, supported by the 

expertise of coauthors Haub and Sharma. 

This article presents, for the first time, BLS

estimates of compensation in India’s “organized” manufacturing sector—the portion of the country’s manufacturing activity 

that is formally registered with Indian state 

governments, making it subject to regulation. BLS estimates that in 2005, the latest 

full year for which data were available at 

the time this article was written, employers in India’s organized manufacturing sector compensated employees at a mean rate 

of $0.91 an hour—approximately 3 percent 

of the compensation level of manufacturing 

employees in the United States. (All averages referred to in this article are means.)

This article describes the Indian manufacturing industry and the differences between the organized and unorganized sectors. However, it focuses primarily on the 

organized manufacturing sector. This sector 

produces over two-thirds of India’s manufacturing output, and the firms in this sector are more comparable to enterprises in 

advanced countries than are firms in the 

unorganized sector.3 The article also discusses India’s statistical system, features of 

the available Indian manufacturing industry 

data, the procedure used by BLS to estimate 

hourly compensation, and compensation 

trends both in all manufacturing and in 18 

industries within manufacturing. Lastly, it 

addresses the commonly made comparison 
Manufacturing in India

4 Monthly Labor Review • May 2010

of Indian and Chinese manufacturing. 

Background

The Bureau of Labor Statistics calculates and publishes 

hourly compensation costs in manufacturing for all employees in 32 countries and for production workers in 

34 countries.4 In recent years, BLS has added emerging 

economies to these two series, which previously had contained only data from developed countries. Although India has been recognized among developing economies for 

the abundance and quality of its statistics, compensation 

estimates for India’s manufacturing sector cannot yet be 

incorporated into the main BLS comparative compensation series because of limitations such as a lack of timely 

data publication, absence of data on recorded work hours, 

and a likelihood of many businesses reporting innacurate 

data. Instead, BLS hopes to present data for India as a special supplemental series—an approach similar to that used 

for China, another country for which BLS has identified a 

number of data quality issues, and a country to which India is often compared.

5 Because these two countries have 

become important forces in the global economy, there is 

value in studying the compensation data for both countries, to the extent possible. 

This article presents, for the first time, BLS estimates of 

compensation in the organized sector on an estimated 

hourly basis in Indian rupees and in U.S. dollars for the 

period from 1999 to 2005. The limitations of the estimates also will be discussed. The analysis in this article 

uses information published by India’s national statistical 

organizations, the primary source being the Indian Annual Survey of Industries (ASI), which collects employment and compensation data for the country’s organized 

manufacturing sector.

The Indian statistical system

Unlike most developing countries, India has a long history of conducting surveys and maintaining statistics, and 

its systems have evolved and remained relevant to changing economic and political conditions. Statistical systems 

in India can be traced back as far as the fourth century 

BC, when rulers maintained information on population, 

land, and agricultural production primarily to serve their 

own needs. In general, data collection was neither highly 

developed nor well coordinated until after India gained 

its independence in 1947, when the need for more advanced economic planning arose.6

 By the early 1950s, the 

country had established the Central Statistical Organisation (CSO), which coordinates the state statistical offices, 

and the National Sample Survey Organisation, which 

conducts large-scale sample surveys.7 These two entities 

are currently housed under the Ministry of Statistics and 

Programme Implementation.

In the 1990s, India’s government and its markets underwent changes that put new pressures on the statistical system. The closed economy, driven fundamentally by public 

sector activity, began opening up and relying more heavily 

on the private sector. In January of 2000, the government 

created a formal body—the Rangarajan Commission—to 

review the statistical system and all the official statistics 

it produces.8 In response to the group’s recommendations, India has been working to create a system that is 

more centralized, consistent, timely, credible, and reliable. 

One major initiative is the India Statistical Strengthening 

Project, which calls for creating and maintaining a national business register to allow for more scientific periodic 

business surveys, improve the training of employees who 

work with statistics, and increase resources available to 

the states.9 The experience and history that India has with 

The Bureau of Labor Statistics has been a leader in compiling international comparisons of hourly compensation 

of manufacturing employees over a wide range of countries. 

Despite its large and growing importance in world manufacturing, India has not been included in the comparisons 

because of difficulties in obtaining and interpreting that 

country’s data and because of concerns about the quality of 

the data. Although this Monthly Labor Review article greatly 

facilitates understanding of Indian compensation statistics, 

many problems with data availability, coverage, and reliability remain, as described in the article. Therefore, the Bureau 

does not plan to include India in its regular comparisons of 

hourly compensation costs at this time. This article is intended as the first step toward developing the measures necessary to include India in the regular comparisons series that 

currently comprises 36 countries. Because of the difficulties 

in creating hourly compensation estimates for India, the 

short-term plan is to publish updates for this country, with 

appropriate annotations, separate from the regular series of 

international comparisons of hourly compensation. This is 

similar to how BLS treats hourly compensation estimates developed for China. The final goal of moving India and China 

into the regular comparisons series would, of course, remain 

intact.

Publication of data from India
Monthly Labor Review • May 2010 5

respect to collecting data increases BLS’s confidence in 

the credibility of the Indian statistical system as a reliable 

source of data and information. Still, India acknowledges 

opportunities for improvement and a need to respond to 

its rapidly changing economy. 

Organized sector versus unorganized sector

Although detailed data are available for India’s organized 

sector, they are less plentiful for India’s unorganized sector. Understanding how these two sectors differ is important in analyzing India’s labor statistics.

India’s organized and unorganized sectors generally 

correspond with what economists call the formal and 

informal sectors in other countries.10 The official distinction 

between the organized and unorganized sectors lies in 

whether businesses register with the government and 

regularly maintain prescribed records. According to the 

National Accounts Statistics for India, the organized sector 

comprises enterprises for which statistics are available from 

budget documents, reports, or other such documents. In 

contrast, the unorganized sector refers to those enterprises 

whose activities or collection of data is not regulated under 

any legal provision or enterprises that do not maintain any 

regular accounts.11 Not surprisingly, there are relatively few 

data series that cover the unorganized sector. Individual 

establishments tend to be small, typically employing fewer 

than 10 persons, and many of these “enterprises” have no 

hired workers and operate primarily for family sustenance.

The two sectors also differ in how they contribute to 

India’s thriving manufacturing industry, which accounted 

for approximately 16 percent of India’s real GDP from 

2000 to 2006.12 When measured by output, the organized 

sector dominates, producing approximately two-thirds of 

the country’s manufacturing output.13 The organized sector’s average annual rate of growth was stronger than that 

of the unorganized sector, 13.1 percent compared with 9.9 

percent. When measured by employment levels, however, 

the unorganized sector dominates. According to estimates 

from national data, close to 80 percent of manufacturing 

employees work in the unorganized sector.14 From either 

perspective, the unorganized sector must be regarded as 

an important part of Indian manufacturing, and BLS is 

currently conducting additional research on it. This article’s primary focus, however, is the organized manufacturing sector.

The Annual Survey of Industries

The ASI collects employment and earnings data from the 

organized manufacturing sector for all employees and for 

production workers for each fiscal year, which in India 

runs from April 1 to March 31.15 Although the survey has 

been conducted since 1960, the BLS hourly compensation 

costs series for India’s organized manufacturing sector 

does not begin until 1999, primarily because of industry 

classification changes that occurred before that year and 

would have compromised historical comparisons. 

 Beginning with the ASI of 1998–99 (which is survey 

notation for the fiscal year from April 1, 1998 to March 

31, 1999), data were classified according to the National 

Industrial Classification (NIC) of 1998, which is based on 

the International Standard Industry Classification system (ISIC Rev.3). In 2004, the NIC was modified, and its 

changes were captured in the ASI of 2004–05 (henceforth 

“ASI 2004–05”). However, BLS analysis shows that the 

differences between NIC 1998 and NIC 2004 do not affect 

year-over-year comparisons between the BLS estimates 

for ASI 2004–05 and those for previous survey periods. 

Ultimately, BLS adjusts the Indian manufacturing data to 

make them comparable with data that were calculated in 

a manner consistent with the North American Industry 

Classification System (NAICS). 

The ASI is conducted every year by mail and covers 31 

of the 35 states and union territories that make up India. The four areas not covered likely have little impact on 

measurement because of their small size.16 Because the 

survey frame includes all establishments that have registered with the Indian states, the ASI sample is believed 

to be representative of the organized manufacturing sector.17 Although the data are thought to be characteristic of 

firms in the organized sector, there are important caveats. 

ASI survey data are presented in raw form without adjustments to the ways that employers reported them; there 

are no attempts to contact employers to fill in missing or 

incomplete data or to correct for data that seem out of 

line with other data. In addition, although participation 

is compulsory by the Collection of Statistics Act of 1953, 

penalties for noncompliance are not enforced frequently.18

Because of the problem of nonresponse and because no 

attempt is made to impute values for employers that do 

not respond, the results are dependent upon which establishments return the survey questionnaire. These problems 

cause the data to be less reliable than survey data that are 

adjusted by the receiving statistical agency, or data that are 

weighted to be representative of the entire survey population. 

The ASI covers manufacturing activities as defined by 

the Indian Factories Act as any of the following five processes:
Manufacturing in India

6 Monthly Labor Review • May 2010

(i) “making, altering, ornamenting, finishing, packing, 

oiling, washing, cleaning, breaking up, demolishing 

or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery 

or disposal; or

(ii) pumping oil, water, or sewage; or

(iii) generating, transforming or transmitting power; or

(iv) composing types for printing by letter press, lithography, photogravure or [a] similar process, or binding [books]; or

(v) constructing, reconstructing, repairing, refitting, finishing or breaking up ships or vessels.”19

The manufacturing sector is defined differently in the 

BLS hourly compensation series. Under the 2007 NAICS, 

manufacturing “comprises establishments engaged in the 

mechanical, physical, or chemical transformation of materials, substances, or components into new products.”20

The assembling of component parts for manufacturing is 

considered manufacturing, except in cases in which the 

activity is classified in construction. In order to reconcile 

hourly compensation costs calculated by use of the NAICS definition of manufacturing with those calculated by 

use of the ASI definition, BLS must remove from the raw 

Indian data all publishing activity as well as industries engaged in items (ii) and (iii) of the Factories Act definition 

of manufacturing.21

Data features

Knowledge of ASI data reporting practices and the salient 

features of the ASI data are important to understanding 

the estimates presented in this article and their limitations. Trends in employment, including the growth of 

contract labor in the organized manufacturing sector, will 

be discussed, as will the lack of data on payment for overtime work. As noted earlier, ASI data are reported as they 

are collected and are not weighted to represent India’s entire organized manufacturing sector. The results are based 

on whichever factories respond to the survey in any given 

year. General trends can be compared across years for all 

of manufacturing and for subsectors within manufacturing, but ASI data on industries with 4-digit NIC codes 

generally are not comparable from one year to the next.

The growth of contract labor. In 2005–06, the most recent 

fiscal year for which data from the ASI are available, 8.7 

million people were covered in the survey and reported 

as employed in India’s organized manufacturing sector.22

(See table 1.) As mentioned earlier, there are difficulties 

in estimating trends in employment by use of data from 

the ASI because the survey results are not representative of 

the entire organized manufacturing sector. The National 

Sample Survey Organisation does not publish response 

rates, and, as mentioned earlier, data from the ASI are not 

adjusted to account for nonresponse.23 Despite these limitations, it is possible to discern from the data that some 

changes in the makeup of the Indian organized labor 

force are occurring.

BLS produces data for two groups of people in its international series on hourly compensation in manufacturing: all employees and production workers.24 Production 

workers are defined as those employees who are engaged 

in fabricating, assembly, and related activities; material 

handling, warehousing, and shipping; maintenance and 

repair; janitorial and guard services; auxiliary production; 

or other services closely related to the aforementioned activities. Working supervisors generally are included; apprentices and other trainees generally are excluded. The 

category all employees comprises production workers as 

well as other workers employed full time or part time in 

an establishment during a specified payroll period. Temporary employees are included. People are considered 

employed if they receive pay for any part of the specified pay period. Unpaid family workers, workers in private 

households, and the self-employed are excluded. Typically, contract workers are excluded from BLS estimates of 

hourly compensation, but for India, contract workers are 

Table 1. Employment in India's organized manufacturing sector, 1998–2006

[Numbers in thousands]

Type of employees 1998–99 1999–2000 2000–01 2001–02 2002–03 2003–04 2004–05 2005–06

All employees............................................................................. 8,317 7,857 7,634 7,400 7,590 7,518 8,064 8,688

 All production workers........................................................ 6,174 6,049 5,933 5,757 5,961 5,887 6,373 6,893

 Directly employed................................................................ 5,213 4,857 4,725 4,507 4,591 4,440 4,685 4,920

 Employed through contractors...................................... 960 1,192 1,208 1,249 1,369 1,447 1,688 1,973

 Employees other than production workers.................. 2,143 1,808 1,702 1,643 1,629 1,631 1,691 1,800

SOURCE: BLS estimates made by use of Annual Survey of Industries data 

from the Central Statistical Organisation of India.

NOTE: Data are not as originally published. Industries were removed to 

make data comparable with estimates that were calculated in a manner 

consistent with NAICS. Because of rounding, some sums of components do 

not equal their respective totals.
Monthly Labor Review • May 2010 7

included in both the production workers and all employees series because their wages are reported together with 

the earnings of other workers and cannot be separated. 

According to ASI 2005–06 data, production workers accounted for 79.3 percent of all employment in the 

organized manufacturing sector in India, an increase of 

approximately 5 percentage points from 1998–99, when 

production workers accounted for 74.2 percent of total 

organized manufacturing sector employment. (See chart 

1 for information on the structure of employment). This 

increase in production workers’ share of employment was 

driven by an increase in the number of contractors employed as production workers in the organized manufacturing sector—a number that more than doubled over the 

period in question. In 1998–99, contract workers accounted for only 15.6 percent of the employment of production 

workers; by 2005–06, contract workers accounted for 28.6 

percent of production workers’ employment. The increase 

in the proportion of contract workers in the organized 

manufacturing sector has likely helped keep overall labor 

costs lower over the period in question because employing contract workers is a legal way for employers to avoid 

many of the costs associated with hiring workers directly, 

such as the costs of social insurance and paid vacation. 

The use of contract labor has been cited as a global trend 

and a phenomenon by which, according to Amit K. Bhandari and Almas Heshmati, workers earn lower wages and 

also are “deprived of benefits like health, safety, welfare 

and social security.”25 Bhandari and Heshmati found that, 

in the Indian labor market, workers continue to accept 

these types of job arrangements because they tend to prefer secure employment to employment opportunities that 

are less secure, even if the less secure opportunities are potentially more lucrative. It is likely that large growth in the 

number of contracted production workers has caused the 

average compensation estimates published here for both 

production workers and all employees to be lower than 

they otherwise would be. Earnings of contract workers are 

included in the earnings data for all workers, but the ASI 

does not publish separate earnings data for contract workers. Therefore, it is not possible to determine directly the 

effect of contract work on earnings in India.26

Hours, part time, and overtime. BLS needs data on the 

number of hours that employees worked, as well as information on employers’ practices as regards compensating 

employees. BLS estimates assume a 6-day, 8-hours-perday workweek on the basis of research and interviews, as 

described in the following paragraphs. 

In the ASI, wages are based on gross amounts paid to 

workers in general; no distinction is made between wages 

paid to full-time workers and wages paid to part-time 

workers. This is a common limitation of earnings and 

compensation data across countries. Additionally, because regular-time earnings and overtime earnings are 

combined when they are reported, average wage data include the effect of an unknown number of overtime hours, 

which may be paid at a higher rate. Overtime is common 

Chart 1. Structure of employment in India’s organized manufacturing sector

All employees

Production workers Salaried workers

Directly hired 

production workers Contract production 

workers
Manufacturing in India

8 Monthly Labor Review • May 2010

in Indian manufacturing, but no data on actual overtime 

hours are available. Government regulations in India stipulate that workers be paid twice their regular earnings for 

each hour of overtime worked.27 However, it is not clear 

how many workers in the manufacturing industry actually 

receive this increased wage for their overtime hours. For 

those who do receive it, it is not clear whether they receive 

the full amount to which they are entitled or only some 

fraction of it. 

The practice of ignoring regulations regarding hours 

worked and overtime and the practice of using contract 

labor to circumvent paying required amounts are widespread in India; fortunately, some employers were willing to provide information on an anonymous basis during personal interviews and through a small, independent 

survey of manufacturing establishments administered by 

coauthors Haub and Sharma in Faridabad, Haryana state, 

an industrial suburb of Delhi, in July 2006 specifically 

for this article.28 A branch supervisor of a private printing firm provided information on common practices.29 At 

his firm, the normal workday is 8 hours, with overtime 

worked as needed. He stated that his firm and others with 

which he is familiar pay an overtime rate that equates to 

the amount required by law, 2 times salary, but added that 

he was also aware of printers who pay less than the legally 

required rate. He noted that most employment contracts 

are arrived at orally, are typically cash transactions, and 

that the records kept by employers do not always reflect 

reality. 

The supervisor also noted that 50 percent of workers at 

his firm were contract labor, a high proportion, and that 

the hours worked “do not matter” (meaning that a person’s 

salary will be the same whether he or she works regular 

hours or long hours). Work that is somewhat irregular in 

nature is often contracted, and most contracted work is 

not regulated. Employers and contracted workers negotiate a specific job, and the workers are paid a lump sum 

for the work, regardless of the number of hours the job 

eventually takes. 

During other interviews, respondents provided less 

specific information, but one theme was expressed repeatedly—enforcement difficulties are compounded by 

employee connivance in circumventing hours and overtime pay regulations. Employees frequently wish to work 

additional hours and to earn more than the standard 

hourly rate doing so, but employers often point out that 

they can simply hire additional workers who are happy 

to work at the regular rate because there is a large number of workers competing for jobs. As a result, workers 

who work beyond the standard number of hours usually 

do not receive the proper overtime pay, if they receive any 

additional pay at all. Overall, the respondents did report 

that a 6-day, 8-hours-per-day workweek is the common 

practice, which is in line with the hours estimate used in 

the BLS calculations. 

It is important to consider these cultural practices and 

data nuances when one interprets the hourly compensation figures presented in this article. The increase in contract labor has likely suppressed the average hourly cost 

of compensation in Indian manufacturing over time. Additionally, it is not clear how much work is occurring “off 

the books.” The addition of pay for work done beyond the 

number of hours in a standard workweek could cause the 

average hourly compensation estimate to be slightly inflated since those additional hours worked are not included in the BLS estimates (and the pay for those hours would 

be estimated at a higher rate). Although earnings, hours, 

and employment that are not documented by employers 

likely affect the hourly compensation estimates presented 

in this article, no adjustments have been made because the 

magnitude of the unrecorded data is not known. BLS estimates are based on the data as they are reported in the ASI.

Lastly, there are a number of inconsistencies in the ways 

factories respond to some survey items in the ASI, which 

reduces the level of detail that can be shown in the survey 

reports. For example, although the ASI questionnaire includes columns titled “contribution to provident & other 

funds,” “workman & staff welfare expenses,” and “bonus,” 

all broken down by type of worker, a substantial number 

of respondents simply write in a lump sum for all workers. The Indian term for this practice in reporting data is 

“clubbing,” and, when it occurs, only aggregate expenses 

for all employees are reported. For the BLS estimates, this 

does not present a problem. In the BLS hourly compensation series, data on the structure of labor costs for all employees are frequently used to estimate the corresponding 

values for production workers.30 This common practice 

was adopted because of a lack of detailed data on production workers for many countries. BLS analysis has shown 

that in the manufacturing sector data on the structure of 

labor costs for all employees tend to be similar with those 

for production workers.

Hourly compensation estimation procedures

BLS comparative measures of hourly compensation costs 

include both data on hourly direct pay (which comprises pay for time worked, pay for vacations and holidays, 

bonuses, in-kind pay, and other premiums) and data on 

employers’ social insurance expenditures and other labor 
Monthly Labor Review • May 2010 9

taxes (a category that comprises employers’ expenditures 

for legally required insurance programs and contractual 

and private benefit plans, as well as other taxes on payrolls 

or employment). 

The concept of earnings as reported in the ASI for all 

employees is nearly equivalent to the BLS concept of 

total direct pay, except that there are no estimates of pay 

in kind in the ASI data.31 The ASI also reports data on 

social insurance, such as employers’ contributions to the 

provident fund and other funds, and workmen and staff 

“welfare” expenditures (that is, additional expenditures 

that promote the general well-being of employees.)32

In addition to earnings data, a measure of the number 

of days or hours worked by employees in manufacturing 

is needed to calculate hourly compensation.The ASI does 

not report the number of days or hours worked in manufacturing, but does report the number of “man-days.” 

Man-days are days both worked and paid for during the 

accounting year. The number of man-days is calculated by 

summing the number of paid employees working during 

each shift over all the shifts worked on all days. Man-days 

include only days on which employees actually worked; 

because of how they are defined and recorded by employers, man-days do not include days for which employees 

were paid but on which they did not work, such as vacation days and holidays. 

Total hourly compensation can be obtained by a simple 

division equation. The numerator is the sum of total direct 

pay, or earnings (including bonuses), and social insurance 

as reported in the ASI. The denominator is aggregate hours 

worked, which is equal to man-days as reported in the 

ASI multiplied by the estimated number of hours worked 

daily. In order to estimate average hourly earnings, the average number of hours worked daily is necessary. Unfortunately, no data on hours worked are collected in the ASI

or from any other national source. Coauthors Haub and 

Sharma thus solicited information from the CSO on typical working practices in India’s organized manufacturing 

sector, conducted interviews with employers in Delhi, and 

conducted the aforementioned survey in Faridabad in July 

2006.33 All three of these sources indicated that a 6-day 

workweek lasting from 10 a.m. to 6 p.m. is very common. 

BLS thus estimates average daily hours worked at 8.34

To better understand ASI data on compensation in India’s 

organized manufacturing sector, BLS created estimates of 

components of compensation not already reported in the 

ASI: pay for time worked and pay for time not worked (pay 

for vacation days and holidays). Having data on the various components of compensation and how they change 

over time allows for a greater understanding of the trends 

in compensation and what factors affect them. 

To estimate the amount of compensation attributable to 

paid time off, a measure of hours or days paid was needed. 

Estimating the number of days paid for but not worked 

is complicated by the fact that employers are not required 

to pay all workers for vacations and holidays. The Factories Act stipulates that production workers and salaried 

workers in organized manufacturing are entitled to 1 day 

of earned leave for every 20 days worked in the previous 

year.35 Also entering into the calculation are 10 national 

holidays in India during which employees do not work, 

but are paid.36 However, employers are only legally required to provide paid leave to employees who were hired 

directly. There is no legal obligation to provide paid time 

off for contract workers, although the contractor is supposed to do so; however, anecdotal evidence indicates that 

these workers often are not paid for time off. For this reason, BLS calculated an estimate of the number of paid days 

worked and of the number of paid days not worked for 

three separate groups of workers in the Indian organized 

manufacturing sector: directly hired workers other than 

production workers, directly hired production workers, 

and contract workers. 

Man-days in the Indian organized manufacturing sector 

for salaried workers can be derived from data published 

by the CSO for all employees and for production workers. Separate man-days data for directly hired and contract production workers, respectively, are not available, 

so BLS allocated production worker man-days using the 

ratio of people employed as directly hired employees to 

those employed as contract workers. Then, paid leave days 

for salaried workers and directly hired production workers were calculated. The number of paid leave days for 

contract production workers is assumed to be zero since 

employers have no legal obligation to pay them.37 (That 

is, contract workers are removed from the calculation of 

man-days paid but not worked.) Paid leave excluding holidays for non-contract employees is estimated to be 1 day 

for for every 20 days worked (because of the requirement 

in the Factories Act). The sum of paid holidays and paid 

leave days excluding holidays is the total number of days 

paid but not worked; this sum is added to the published 

number of man-days worked to get the total number of 

paid man-days in manufacturing. All the aformentioned 

calculations were done on a per-worker basis.

The ratio of man-days worked to man-days paid can be 

multiplied by the earnings (without bonuses) figure reported in the ASI to provide a rough estimate of aggregate pay for time worked—or basic wages and salaries. All 

employees’ pay for time worked is the sum of production 
Manufacturing in India

10 Monthly Labor Review • May 2010

workers’ pay for time worked and salaried workers’ pay for 

time worked. To get average hourly earnings, this aggregate is then divided by aggregate hours worked, or the 

product of man-days worked and estimated daily hours 

worked. The value of pay for time not worked can also be 

calculated by subtracting aggregate pay for time worked 

from earnings (without bonuses).

Next, total compensation ratios were calculated by BLS. 

The total compensation ratio is a multiplicative factor 

that, when applied to the average hourly earnings figure, 

results in a product equal to total compensation. For India, it was calculated by dividing aggregate total compensation by aggregate total pay for time worked. Total compensation was calculated by summing total direct pay (pay 

for time worked, pay for time not worked, and bonuses) 

and aggregate annual social insurance costs. Aggregate 

annual social insurance costs for all employees in Indian 

manufacturing are equal to employers’ contributions to 

the Provident Fund and other funds plus worker and staff 

welfare expenses. 

As noted earlier, data from the ASI are reported on a fiscalyear basis, from April 1 to March 31. In order to compare 

the total compensation estimates created from fiscal-year 

ASI data with the corresponding estimates from other countries in the BLS hourly compensation series, the data must 

be adjusted to conform to a calendar-year basis. To do this, 

BLS used a weighted average of two sets of ASI fiscal-year 

data. For example, to obtain data for calendar-year 2005, 

BLS applied a weight of 0.25 to ASI 2004–05 estimates and 

a weight of 0.75 to ASI 2005–06 estimates. The 0.25 figure 

represents the quarter of 2005 that is covered in ASI 2004–05 

(January 2005–March 2005) and the 0.75 figure represents 

the three quarters of 2005 that are covered in ASI 2005–06 

(April 2005–December 2005). Under this system of estimation, the most recent calendar year for which ASI data were 

available at the time this article was written was 2005.

Estimate of hourly compensation for production workers. The 

foregoing discussion relates to the procedures used to derive estimates of hourly compensation for all employees in 

manufacturing. BLS also constructed estimates of hourly 

compensation of production workers. Data on earnings of 

production workers are available from the ASI, but those 

data differ from the data for all employees in that bonuses 

are not included. In order to put the production worker 

estimates and the all-employee estimates on a comparable 

basis, BLS derived an estimate of bonuses that was added 

to the earnings of production workers. Bonuses and social insurance have been redistributed among workers in a 

manner proportionate to their earnings; this procedure was 

recommended by the CSO as a method of estimating these 

components of compensation.38 Under the assumption 

that all employees (including production workers) receive 

bonuses in direct proportion to their wages, bonuses were 

estimated by applying the ratio of all employees’ bonuses 

paid to their nonbonus earnings. Like data on bonuses, data for social insurance expenditures for production 

workers are not available from the ASI. Thus, BLS applied 

the ratio of social insurance to earnings for all employees to 

production workers’ earnings in order to derive an estimate 

of social insurance expenditures for production workers. 

Similar methods are used in the BLS series for a number of 

countries for which the requisite production-worker data 

are lacking. Research conducted by BLS in the past for several other countries has shown that this practice does not 

substantially affect the hourly compensation estimates. 

Results

Table 2 displays detailed estimates of India’s hourly comTable 2. Hourly compensation costs in India's organized manufacturing sector, 1999–2005

Year

Mean hourly earnings

in rupees

(hourly pay for time 

worked)

[1]

Total compensation

ratio 

 

[2]

Hourly compensation

in rupees

[3]=[1] × [2]

Exchange 

rate: 

rupees/

USD

[4]

Hourly compensation in 

USD

[5]=[3] ÷ [4]

All employees Production 

workers All employees Production workers All employees Production workers All employees Production workers

1999......... 20.68 15.97 1.423 1.423 29.43 22.72 43.06 0.68 0.53

2000......... 22.54 16.97 1.406 1.406 31.68 23.86 44.94 .70 .53

2001......... 23.77 17.57 1.416 1.416 33.65 24.88 47.22 .71 .53

2002......... 24.95 18.22 1.417 1.417 35.36 25.83 48.63 .73 .53

2003......... 26.58 18.98 1.417 1.418 37.68 26.91 46.59 .81 .58

2004......... 27.57 19.46 1.398 1.398 38.55 27.21 45.26 .85 .60

2005......... 29.10 20.06 1.375 1.376 40.02 27.60 44.00 .91 .63

SOURCE: BLS estimates made by use of Annual Survey of Industries data from the Central Statistical Organisation of India.
Monthly Labor Review • May 2010 11

pensation costs for all employees and for production 

workers. When measured in Indian rupees, total compensation of all employees in India’s organized manufacturing 

sector increased by 36.0 percent from 1999 to 2005. From 

1999 to 2003, total hourly compensation for all employees 

grew, on average, by 6.4 percent each year. The growth of 

hourly compensation slowed to 2.3 percent in 2004 and 

was 3.8 percent in 2005. 

When measured in U.S. dollars the increase for all employees was slightly less (34.1 percent) over the same period because of the depreciation of the rupee relative to 

the dollar. Overall, the rupee depreciated slightly over the 

1999–2005 period, but appreciated from 2002 through 

2005. Increases in hourly compensation were accompanied by decreases in the value of the rupee against the U.S. 

dollar from 1999 to 2002—which is evidenced by relatively small increases in the all-employees section of column 5 

during these years. Hourly compensation as measured in 

U.S. dollars grew much faster from 2003 through 2005 as 

the rupee appreciated against the dollar.

The ratio of total compensation to average hourly earnings rose or stayed the same every year from 2000 to 2003. 

However, the ratio decreased slightly over the last 2 years 

of the 1999–2005 period, declining from 1.417 in 2003 to 

1.375 in 2005. The total compensation adjustment ratio is 

obtained by dividing total compensation by pay for time 

worked; for India, average hourly earnings are equal to pay 

for time worked. 

Changes in total compensation are affected by changes 

in any component of compensation. The components on 

which BLS has data for India’s organized manufacturing 

sector are the following: pay for time worked (average 

hourly earnings), other direct pay (which for India consists primarily of pay for time off and bonuses), and social insurance. (See chart 2.) From 1999 to 2005, average 

hourly earnings increased 40.7 percent, other direct pay 

grew by 31.7 percent, and average social insurance expenditures per hour increased 20.7 percent; in 2004 and 2005, 

average social insurance expenditures actually decreased. 

Widespread pension reform has been occurring across in 

India over the past several years as many states move from 

defined benefit pension schemes to defined contribution 

schemes, but it is unclear exactly what role this has played 

in trends in social insurance expenditures.39 Typically, it 

takes some time for the effects of pension reform programs to show up in labor cost data, and many changes 

have been happening in India simultaneously. Longer 

time series of data for India will likely provide more insight into trends in social insurance. 

Pay for time worked, or basic wages and salaries, accounted for the largest portion of total compensation in 

India’s manufacturing sector by far in 2005 (approximately 73 percent). As noted earlier, this component of compensation grew the fastest in comparison with other components of compensation over the 1999-to-2005 period. 

For production workers, average hourly earnings increased by only 25.6 percent over the 1999–2005 period, 

compared with 40.7 percent for all employees, so total 

compensation for production workers as measured in Indian rupees increased significantly less than it did for all 

employees over the same period (21.5 percent versus 36.0 

percent). Production workers’ total compensation as a percentage of all employees’ total compensation decreased as 

result. (See chart 3.)

ASI data on employment and man-days show that, over 

the 7-year period, the average employee in India’s organized manufacturing sector consistently worked about 

305 days a year, with the exception of 1999, for which 

Chart 2. Components of hourly compensation in India’s organized manufacturing sector, 2005

Total hourly compensation = 40 rupees

Pay for time worked (average hourly earnings) Other direct pay Social insurance

Pay for time worked (average hourly earnings) = 29 rupees Other direct pay = 

4 rupees

Social insurance = 

7 rupees

SOURCE: BLS estimates made by use of Annual Survey of Industries data from the Central Statistical Organisation of India.
Manufacturing in India

12 Monthly Labor Review • May 2010

Chart 3. Total hourly compensation of all employees and of production workers in India’s organized manufacturing sector, 1999–2005

44

28

30

32

34

36

38

40

42

20

22

24

26

1999 2000 2001 2002 2003 2004 2005

78

76

74

72

70

68

66

64

Compensation, in 

rupees

Production workers’ mean 

compensation as a percent 

of all employees’ mean 

compensation

Production workers’ mean compensation as a percent of all employees’ mean 

compensation

Production workers’ mean compensation

All employees’ mean compensation

SOURCE: BLS estimates made by use of Annual Survey of Industries data from the Central Statistical Organisation of India.

the average was 289. This implies that, for the 2000-to2005 period, employees worked an average of just under a 

6-day workweek, which is consistent with the information 

received from the CSO and from interviews with Indian 

employers. 

Comparisons with other countries

Hourly compensation costs in India are among the lowest 

when compared with the 36 countries in the BLS hourly 

compensation series.40 In 2005, India’s average hourly 

compensation cost for all employees in manufacturing 

($0.91) was approximately 3.1 percent of the level seen in 

the United States ($29.74) when measured in U.S dollars. 

(See chart 4.) Over the period from 1999 to 2005, hourly 

compensation costs for all employees in Indian manufacturing fluctuated between 2.7 and 3.1 percent of the 

U.S. level. This fluctuation is due in part to changes in the 

rupee-to-dollar exchange rate. As seen earlier, measured 

in rupees, hourly compensation costs increased each year 

from 1999 to 2005.

Among the economies studied by BLS, the lowest hourly 

compensation costs for all employees in manufacturing in 

2005 were found in India (3.1 percent of the U.S. level) 

and the Philippines (3.6 percent of the U.S. level). The 

average hourly compensation cost for manufacturing production workers in Sri Lanka, a country for which BLS 

publishes hourly compensation cost data for production 

workers only, was 2.3 percent of the U.S. average hourly 

compensation of all manufacturing production workers. 

Compensation costs were moderately higher in Mexico, 

Brazil, the Eastern European countries, and in the countries in East Asia excluding Japan—countries that are 

often thought of as having relatively low manufacturing 

compensation costs.

When BLS hourly compensation estimates for India’s 

production workers were compared with estimates of 

hourly compensation of U.S. production workers, the 

analysis yielded results similar to the those obtained in 

the analysis for all employees. The cost of employing 1 

hour of production worker labor in India in 2005 ($0.63) 

was equal to 2.6 percent of the cost in the United States 

($23.81) as measured in U.S. dollars. (See table 2.) 

Historically, other countries in the BLS series have been 

in comparatively low positions, similar to those of India, 

the Philippines, and Sri Lanka. In 1975, the initial year of 

the BLS hourly compensation series, hourly compensation 

costs for production workers in manufacturing in Korea 
Monthly Labor Review • May 2010 13

and Taiwan were equal to 5 percent and 6 percent of the 

U.S. level, respectively, when measured in U.S. dollars.41

As these countries became larger players in the global 

marketplace, their compensation costs grew more 

quickly than those of the United States, whose global 

manufacturing presence was already well established. 

By 1980, compensation costs in Korea and Taiwan had 

increased to 10 percent and 11 percent of the U.S. level, 

respectively. By 2005, the percentages had increased to 52 

percent and 27 percent. 

Subsectors within manufacturing

Employment and earnings data are also available for 18 

“industries” within the manufacturing sector in India. For 

this analysis, the food manufacturing subsector (NAICS 

311) and the beverage and tobacco product manufacturing subsector (NAICS 312) are considered together as one 

industry. The same goes for the textile mills subsector (NAICS 313) and the textile product mills subsector (NAICS 

314). Each of the other 16 “industries” is a subsector. The 

level of total compensation in all manufacturing can mask 

important differences among the compensation levels in 

the subsectors within manufacturing. In some subsectors, 

employer labor costs are much higher, or much lower, than 

in other subsectors. Also, some subsectors have high employment relative to others. Compensation costs in subsectors within manufacturing can provide insights that 

are useful for making international comparisons, because 

individual subsectors generally play larger roles in some 

countries than in others. Data on all employees’ aggregate 

earnings and on their aggregate social insurance paid, as 

well as on their employment and man-days worked, are 

available for the subsectors. 

In 2005, the lowest hourly compensation costs were 

in food, beverage, and tobacco manufacturing, and in 

wood product manufacturing. (See chart 5.) Employees 

were most highly compensated in the petroleum and coal 

products manufacturing subsector; costs in this subsector 

were more than twice the level faced by employers in all 

manufacturing subsectors on average. However, because 

this subsector accounts for only 1 percent of total 

employment in the organized manufacturing sector, these 

high compensation costs have little effect on the average 

compensation level for all of manufacturing.

Six subsectors make up about half of all manufacturing 

employment in India’s organized sector. The ASI 2005–06 

data show that organized-sector employment is highest 

Chart 4. Mean total hourly compensation cost of manufacturing employees, selected countries and regions, 2005

60

80

100

120

20

40

0

60

80

100

120

20

40

0

United

 States

India Brazil Mexico Euro area1 Eastern 

Europe2

Japan East Asia

 excluding 

Japan3

PhilippinesSri Lanka4

1

 “Euro area” refers to European Union member countries in the BLS series that have adopted the euro as the common currency as of 

January 1, 2009. These countries are the following: Austria, Belgium, Finland, France, Germany, Ireland, Italy, the Netherlands, Portugal, 

Slovakia, and Spain. 

2

 Czech Republic, Hungary, Poland, and Slovakia.

3

 Republic of Korea, Philippines, Singapore, and Taiwan. 

4

 Data are for production workers only.

Index 

($29.74 = 100)

Index 

($29.74 = 100)

SOURCES: See ftp://ftp.bls.gov/pub/special.requests/ForeignLabor/ichccaesuppt01.txt for data on all employees, and see 

 ftp://ftp.bls.gov/pub/special.requests/ForeignLabor/ichccpwsuppt01.txt for data on production workers in Sri Lanka.
Manufacturing in India

14 Monthly Labor Review • May 2010

in the following industries: food, beverage, and tobacco 

manufacturing (two subsectors considered together, as 

previously mentioned); textile and textile product mills 

(two subsectors considered together, as previously mentioned); chemical manufacturing (NAICS 325); and primary metal manufacturing (NAICS 331).42 (See table 3.) 

Food, beverage, and tobacco manufacturing, and textile 

and textile product mills are among the lowest paid industries in India’s organized manufacturing sector and in 

2005–06 accounted for over 36 percent of all organizedsector manufacturing employment. Their high employment share and low compensation levels drag down the 

average compensation level for all of manufacturing. 

Data on employment of production workers in 

manufacturing subsectors are reported in the ASI; however, 

man-days for production workers in the subsectors are 

not. Because man-days are directly linked to the level 

of employment in any given industry, BLS was able to 

estimate the number of man-days worked by production 

workers in each of the manufacturing subsectors by use 

of employment and man-days data for all employees and 

employment data for production workers.

In 2005, the average hourly compensation cost for production workers in India’s organized manufacturing sector 

was 31 percent lower than average hourly compensation 

for all employees. (See chart 5.) Within manufacturing, 

however, the ratio of the mean hourly compensation of 

production workers to that of all employees varied across 

industries. Among the industries analyzed, the ratio was 

the greatest in textile and textile product mills, where 

hourly compensation of production workers was equal 

to 83 percent of the level of hourly compensation of all 

employees. In the computer and electronic product manufacturing subsector (NAICS 334), the difference between 

the hourly compensation of all employees and that of 

production workers varied greatly; the average compensation of production workers was only 52 percent of the 

average compensation of all employees in the same subsector. Generally, subsectors that required more technical 

expertise tended to have greater differentials between all 

employees’ average hourly compensation and that of production workers. 

International comparisons of subsectors within manufacturing. As previously noted, when 2005 data from other 

countries in the BLS series are compared with those from 

India, only the Philippines is found to have similar hourly 

compensation costs in the manufacturing industry as a 

Chart 5. Mean total hourly compensation in India’s organized manufacturing sector, by subsector, 2005

0 20 40 60 80 100 120

311 and 312, Food, beverage, and tobacco

321, Wood products

316, Leather and allied products

315, Apparel

313 and 314, Textile and textile product mills

327, Nonmetallic mineral products

326, Plastic and rubber products

322, Paper

332, Fabricated metal products

31 to 33, All manufacturing (excluding publishing)

337, Furniture and related products

325, Chemicals

335, Electrical equipment, appliances, and components

331, Primary metals

333, Machinery

334, Computer and electronic products

324, Petroleum and coal products

Subsector(s) 

All employees

Production workers

Rupees per hour

336, Transportation equipment

SOURCE: BLS estimates made by use of Annual Survey of Industries data from the Central Statistical Organisation of India.
Monthly Labor Review • May 2010 15

Table 3. Employment in subsectors within India's organized

 manufacturing sector, 2005–06

 

NAICS

code(s) Subsector(s)

Percent 

of total 

manufacturing 

employment 

(8,688)

31–33 All manufacturing (excluding publishing)................ 100.0

311–312 Food, beverage, and tobacco......................................... 20.9

313–314 Textiles and textile product mills.................................. 15.3

325 Chemicals.............................................................................. 9.5

331 Primary metals.................................................................... 7.4

327 Nonmetallic mineral products....................................... 6.6

336 Transportation equipment.............................................. 6.4

315 Apparel................................................................................... 6.2

333 Machinery............................................................................. 5.3

332 Fabricated metal products.............................................. 4.2

326 Plastics and rubber products......................................... 3.6

335 Electrical equipment, appliances, and 

components....................................................................

3.1

322 Paper........................................................................................ 2.3

316 Leather and allied products............................................ 2.0

334 Computer and electronic products.............................. 1.6

324 Petroleum and coal products......................................... 1.0

321 Wood products.................................................................... .6

337 Furniture and related products..................................... .4

SOURCE: BLS estimates made by use of Annual Survey of Industries data 

from the Central Statistical Organisation of India.

NOTE: The sum of the subsectors’ percents of total manufacturing employment does not equal 100 because of the exclusion from the table of 

certain subsectors whose data BLS does not publish.

 

whole. International comparisons of hourly compensation 

costs in manufacturing subsectors also can be made. (See 

chart 6.) When hourly compensation costs are calculated 

as a percentage of those costs in the United States, labor 

in India is found to be substantially less expensive than 

labor in the Philippines in five industries: food, beverage, 

and tobacco manufacturing; textile and textile product 

mills, chemical manufacturing; nonmetallic mineral product manufacturing; and transportation equipment manufacturing. Hourly compensation costs in these industries 

were at least 1.25 percentage points lower in India than in 

the Philippines when measured as a percentage of hourly 

compensation costs in the United States. For countries 

with such low levels of labor costs, a difference of 1.25 

percentage points, or more, of the U.S. level is significant—in the food, beverage, and tobacco manufacturing 

industry, costs in the Philippines ($1.03) are actually double those in India ($0.51). Although these results can vary 

from year to year depending on currency exchange rates, 

they do provide an example of labor costs within manufacturing varying across countries to a greater extent than 

they do in manufacturing as a whole.43

Comparisons of India with China

India and China are two countries that often have been 

compared in terms of their manufacturing and development potential. Even with the recent growth in India’s 

manufacturing activity, the manufacturing sector in India 

is still considerably smaller than the manufacturing sector 

in China. The $70 billion in manufacturing goods exported by India over the 2006 fiscal year is still only one-tenth 

of the $700 billion in manufactured goods exported by 

China in 2005.44 The difference in the magnitude of the 

manufacturing sector can also be seen when one compares 

manufacturing activity with overall GDP for each country. 

Over the period from 2000 to 2005, manufacturing accounted for 32 percent of China’s GDP, while accounting for only 16 percent of India’s GDP.

45 In 2005, 108.4 

million workers were employed in China’s manufacturing 

sector on average, while only 8.7 million were employed in 

India’s organized manufacturing sector, according to ASI

2005–06.46 Even when workers in the unorganized sector are included, India’s total manufacturing employment 

is still dwarfed by employment in the Chinese manufacturing sector. For now, China’s manufacturing sector 

outweighs India’s—even when the unorganized sector is 

included. 

In terms of population, India has been growing faster 

than China, and it surpassed 1 billion people in the year 

2000.47 In 1990, the population of India was equal to 73 

percent of the population of China. By 2008, India’s population had grown to equal 86 percent of the level in China. 

Additionally, India’s population is younger than China’s. 

(See charts 7 and 8.) Because India’s population pyramid 

is currently bottom heavy, or concentrated in the younger 

age groups, over the next few decades the working-age 

population will grow considerably. This larger labor supply 

could serve as a source of growth for the manufacturing 

sector in India. China’s population pyramid is different in 

that the largest segment of the population is currently in 

the 35–44 age range and the younger age groups contribute less to the overall population. Thus, one would not expect the working-age population in China to experience 

the same rate of growth as that in India. 

The growing manufacturing sectors of India and China 

have attracted much interest in recent years. As regards 

statistics, it was mentioned earlier that India’s statistical system is already highly developed relative to that of 

many other developing countries, even as it strives to improve itself. In China, the private sector has been largely 
Manufacturing in India

16 Monthly Labor Review • May 2010

Chart 6. Hourly compensation costs in India and the Philippines as a percent of costs in the United States, measured in U.S. dollars, 2005

0.0 1.0 2.0 3.0 4.0 5.0 6.0

311 and 312, Food, beverage, and tobacco

321, Wood products

316, Leather and allied products

315, Apparel

313 and 314, Textile and textile product mills

327, Nonmetallic mineral products

326, Plastic and rubber products

322, Paper

332, Fabricated metal products

31 to 33, All manufacturing (excluding publishing)

325, Chemicals

335, Electrical equipment, appliances, and components

331, Primary metals

336, Transportation equipment

Subsector(s) 

Percent (U.S. costs = 100 percent)

Philippines

India

SOURCE: BLS estimates made by use of Annual Survey of Industries data from the Central Statistical Organisation of India; 

 see ftp://ftp.bls.gov/pub/special.requests/ForeignLabor/aecountrytables.txt for Philippines data.

Chart 7. Population pyramid, India, 2006

Percent

Age

0 1 2 3 4 5 6 7

70–74

75–79

0–4

5–9

10–14

15–19

20–24

25–29

30–34

35–39

40–44

45–49

50–54

55–59

60–64

65–69

80+

70–74

75–79

0–4

5–9

10–14

15–19

20–24

25–29

30–34

35–39

40–44

45–49

50–54

55–59

60–64

65–69

80+

Age

Males Females

7 6 5 4 3 2 1

SOURCE: Population Reference Bureau projections, based on the 2001 Census of India.
Monthly Labor Review • May 2010 17

neglected in statistics; the dominance of private sector 

businesses in today’s economy does not fit easily into the 

theories and ideologies that prevailed in China in the 

recent past.48 During the most recent quarter century of 

economic reform, China has been working to adopt better, internationally recognized statistical practices, with 

guidance from developed countries and from international organizations such as The World Bank and the International Monetary Fund. However, much work remains 

to be done. 

BLS has conducted extensive research on China’s 

manufacturing sector and published research on 

employment and hourly compensation in Chinese 

manufacturing.49 In November 2006, BLS published, for 

the first time in a news release, a supplemental hourly 

compensation series for Chinese manufacturing; it 

covered the years 2002–04. To date, estimates for China 

through 2006 are available from BLS.

50

BLS now has estimates of hourly compensation for employees in manufacturing in both India and China. These 

estimates can be compared to gain insight into the relative compensation costs in the two countries, but they are 

not derived by use of the same methods. The features of 

the Chinese source data and the BLS hourly compensation estimation methods vary from those used in the series for India. Readers should refer to articles previously 

published in The Monthly Labor Review for a comprehensive description of the estimation methods used to calculate hourly compensation costs for employees in Chinese 

manufacturing.51

For China, hourly compensation estimates can be broken into three employment-based groups: all employees, 

employees in urban enterprises, and employees in town 

and village enterprises. As discussed, the compensation 

costs presented for India refer to all employees in the organized sector. Compensation costs for employees in India’s unorganized sector are not presented here. Because 

the employment groups are defined differently for each 

country, and because of how difficult it can be to collect 

reliable data on employment and compensation in both 

India and China, there are limitations associated with 

comparisons of hourly compensation costs between the 

two countries. Nevertheless, BLS research on both countries indicates that the concept of all employees in the organized manufacturing sector in India is similar enough 

to the “all employees” concept for manufacturing in China 

(estimates are calculated as the employment-weighted average of Chinese urban and town and village enterprise 

Chart 8. Population pyramid, China, 2007

Percent

Age

0 1 2 3 4 5 6 7

70–74

75–79

0–4

5–9

10–14

15–19

20–24

25–29

30–34

35–39

40–44

45–49

50–54

55–59

60–64

65–69

80+

70–74

75–79

0–4

5–9

10–14

15–19

20–24

25–29

30–34

35–39

40–44

45–49

50–54

55–59

60–64

65–69

80+

Age

Males Females

7 6 5 4 3 2 1

SOURCE: U.S. Census Bureau, International Data Base.
Manufacturing in India

18 Monthly Labor Review • May 2010

Chart 9. Mean hourly compensation costs in the manufacturing sectors of India and China as a percent of corresponding costs in the United States, 2002–05

Percent of 

U.S. cost

3.0

0.0

0.5

1.0

1.5

2.0

2.5

3.5

2002 2003 2004 2005

3.0

0.0

0.5

1.0

1.5

2.0

2.5

3.5

Percent of 

U.S. cost

Costs in India as percent of

costs in U. S.

Costs in China as percent of

costs in U.S.

NOTE: Mean hourly compensation costs for all manufacturing employees in China were the following: $0.57 in 2002, $0.62 in 2003, $0.67 

in 2004, and $0.73 in 2005. The corresponding costs in India are reported in table 2.

SOURCES: BLS estimates made by use of Annual Survey of Industries data from the Central Statistical Organisation of India; International 

comparisons of hourly compensation costs in manufacturing, 2007 (Bureau of Labor Statistics), March 26, 2009.

manufacturing) to allow for rough comparisons to be 

made. 

Organized-sector compensation costs in India and 

compensation costs for all employees in Chinese manufacturing were both very low in comparison with corresponding costs in the United States from 2002 through 

2005. Chart 9 shows that costs in China were lower than 

those in India each year. During this period hourly compensation costs increased by 25 percent in India and by 28 

percent in China as measured in U.S dollars. According to 

preliminary BLS research, if data were available to create 

a series on hourly compensation encompassing the total 

number of employees in Indian manufacturing—including employees in both the organized and unorganized sectors—the estimate would be considerably lower because 

workers in India’s unorganized sector earn substantially 

less than their organized-sector counterparts and greatly 

outnumber them.

It has been reported that some manufacturers are finding labor shortages in China, a situation that is already 

causing wages to rise and making goods costlier to produce.52 Businesses that choose India for offshore production face challenges as well, many of them stemming from 

the current state of India’s infrastructure and labor laws. It 

is estimated that the average manufacturer in India loses 

8.4 percent of its potential sales each year because of power outages, compared with less than 2 percent for the average manufacturer in China.53 In 2005, annual spending 

on infrastructure as a share of GDP in India was 5.9 percent, compared with 14.6 percent in China.54 In addition, 

the nature of manufacturing in India tends to be different 

from that in China. China’s factories tend to be very large 

scale facilities that specialize in low-cost manufacturing of 

goods. In terms of value, the major items that are imported by the United States from China include the following: 

toys and sporting goods, miscellaneous household goods, 

computers and computer accessories, telecommunications 

equipment, video equipment, and cotton household furnishings and clothing.55 In India, extensive required paperwork, restrictive labor laws, and spotty power supplies 

make large-scale factories less common than in China. 

Instead of using big factories, a large portion of Indian 

manufacturing relies on a mix of technical skill and lowcost labor to produce goods. India appears to have a competitive advantage over China in the manufacture of such 

items as cell phones, car parts, and apparel items that are 

more complex to construct.56 In terms of value, the major 

manufacturing imports from India into the United States 
Monthly Labor Review • May 2010 19

are items such as jewelry; medicinal, dental and pharmaceutical preparations; drilling and oil field equipment and 

platforms; and industrial machinery.57

Although employers’ labor costs in Indian and Chinese 

manufacturing are currently at similar levels, a 2002 Confederation of Indian Industry report created by McKinsey 

& Company indicated that the retail price of the average 

Chinese product is about 30 percent lower than the retail 

price of the same product produced in India, in spite of 

similar labor costs and other input costs.58 The Indian National Manufacturing Competitiveness Council has gone 

on record asserting that the key to improving India’s position in global manufacturing is to keep costs low.59 Of 

course, manufacturing involves many other costs as well, 

such as shipping, raw materials, and tariffs. The Council 

also strongly endorsed the Second National Labor Commission’s recommendation that India harmonize its currently scattered labor laws, stating that “with the harmonization not only will the flexibility improve in the organized labor market, simultaneously better social security 

provisions will also be made in the unorganized sector.”60

As more reforms are implemented and more resources invested, it will be of interest to the world whether India 

expands its share in global manufacturing. 

Recent economic trends

According to India’s Central Statistical Office, growth in 

Indian manufacturing in fiscal year 2006–07 was strong. 

In the organized sector, at constant prices, the GDP growth 

rate from 2005–06 to 2006–07 was 11.6 percent.61 From 

2006–07 to 2007–08, GDP growth slowed in the organized 

sector, but was still impressive: 7.6 percent. In manufacturing overall, including both the organized and the unorganized sectors, growth in GDP was slightly higher during 

these years—11.8 percent from 2005–06 to 2006–07 and 

8.2 percent from 2006–07 to 2007–08. However, the global financial crisis that started in 2008 did not leave India 

untouched. Even though India is not a huge exporter and 

has a large domestic market for its goods, growth slowed 

considerably, to 2.4 percent from 2007–08 to 2008–09 in 

the organized sector. (When this article was authored, 

only GDP figures for total manufacturing were available). 

The global financial crisis also indirectly affected India’s 

growth potential because of the extent to which other 

countries around the globe were hit. India’s plan to invest 

$500 billion in infrastructure improvements from 2008 

through 2012 may have to be revisited, since one-third 

of that money was to come from the private sector. In 

2007, “some of the world’s biggest banks and private-equity funds announced dedicated infrastructure funds with 

India as a priority,” and now, India is looking for those 

investors to begin building new roads. 62 As of April 2009, 

the National Highways Authority of India (NHAI) was 

having difficulty finding bidders on its infrastructure projects. However, by April 2010, the NHAI had restructured 

its project plans and its bidding requirements to attract 

more bidders.63 In order for India to reach the level of 

exports envisioned by India’s National Manufacturing 

Competitiveness Council and for manufacturing to truly 

be the engine of growth that it envisions, infrastructure 

growth in all forms—roads, power sources, ports, and so 

forth—likely will be important. Of course, manufacturing 

growth can be spurred by consumer demand as well. A 

recent BusinessWeek article states that domestic demand 

accounts for two-thirds of the Indian economy and that 

Indians can “buy their way to growth.”64 BLS will continue 

to make estimates and monitor trends in hourly compensation costs in India’s organized manufacturing sector as 

updated ASI data are released by the CSO.

65

Notes

ACKNOWLEDGMENTS: The authors thank Chris Sparks, Connie 

Sorrentino, Bradley Nicholson, Elizabeth Zamora, Andrew Petajan, 

Jake Kirchmer and Marshall Carter, all of the BLS Division of International Labor Comparisons, for their assistance in the preparation of 

this article.

1 “Table. PPP Conversion Factors and Share of Global Output, 

2007” (Washington, DC, International Monetary Fund, January 8, 

2008). Visit www.imf.org/external/pubs/ft/survey/so/2008/res018a.

htm and click on “Link to PPP data” under “Related Links (visited Apr. 

26, 2010); WTO: developing, transition economies cushion trade slowdown, 

Press/520/Rev. 1 (World Trade Organization) Apr. 17, 2008, Appendix 

Table 3, “Merchandise trade: leading exporters and importers, 2007,” 

on the Internet at www.wto.org/english/news_e/pres08_e/pr520_e.

htm#appendix_table3 (visited Apr. 26, 2010).

2 The National Strategy for Manufacturing (Government of India National Manufacturing Competitiveness Council, March 2006), 1.1, p. 

2, on the Internet at http://nmcc.nic.in/pdf/strategy_paper_0306.

pdf (visited Apr. 26, 2010). 

3 Statement 010. Summary of macro economic aggregates at constant 

(1999-2000) prices, 1950-51 to 2008-09 (Government of India, Ministry of Statistics and Programme Implementation, Central Statistical 
Manufacturing in India

20 Monthly Labor Review • May 2010

Organisation, National Accounts Division), on the Internet at www.

mospi.gov.in/mospi_nad_main.htm (visited Apr. 26, 2010).

4 International Comparisons of Hourly Compensation Costs in Manufacturing, News Release number USDL 09–0304, (Bureau of Labor 

Statistics, Mar. 26, 2009). 

5 Judith Banister, “Manufacturing earnings and compensation in 

China,” Monthly Labor Review, August 2005, pp. 22–40, on the Internet at www.bls.gov/opub/mlr/2005/08/art3full.pdf; and International Comparisons of Hourly Compensation Costs in Manufacturing.

6 Report of the National Statistical Commission, section 1.1 (Government of India, Ministry of Statistics and Programme Implementation, 

Sept. 5, 2001), on the Internet at http://mospi.gov.in/nscr/hp.htm

(visited May 11, 2010). 

7 Ibid.

8 Ibid, section 14.2.

9 Dr. Govindan Raveendran, Reforming the Indian Statistical System

(Organisation for Economic Co-operation and Development), The 

Statistics Newsletter, February 2006, on the Internet at www.oecd.org/

dataoecd/13/62/36132793.pdf (visited May 11, 2010).

10 See Key Indicators of the Labor Market (International Labour 

Organization), section 7, on the Internet at http://ilo-mirror.library.

cornell.edu/public/english/employment/gems/eeo/download/

kilm07.pdf (visited May 12, 2010). 

11 Informal Sector in India: Approaches for Social Security (Government 

of India, Ministry of Labour), p. 2, on the Internet at http://labour.

nic.in/ss/INFORMALSECTORININDIA-approachesforSocialSecurity.pdf (visited Apr. 29, 2010). The unorganized sector includes enterprises run by unincorporated businesses and partnerships, 

in addition to cooperative societies (co-ops owned and managed by 

and for the benefit of the customers or workers), trusts (corporations 

organized to perform a fiduciary function), private companies (firms 

not owned by the government) and limited companies (corporations 

with shareholders whose liability is limited by shares), all of which are 

not included in the informal sector as defined by the International Labour Organization.

12 Statement 010. Summary of macro economic aggregates.

13 Output is measured at factor cost. BLS was unable to locate reliable data that could indicate the portion of India’s manufacturing exports that are produced in the organized sector or the portion produced 

in the unorganized sector.

14 See the 1999–2000 Annual Survey of Industries (Government 

of India, Ministry of Statistics and Programme Implementation), on 

the Internet at http://mospi.gov.in/mospi_asi.htm; and Employment and Unemployment in India, 1999-2000: Key Results, Report No. 

455(55/10/1) (Government of India, Ministry of Statistics and Programme Implementation, National Sample Survey Organisation), on 

the Internet at http://www.mospi.gov.in/mospi_nsso_rept_pubn.

htm (visited May 11, 2010). The ASI’s exact coverage of the manufacturing sector cannot be determined because the sample is drawn 

from the list of registered factories and not from a complete list of all 

manufacturing establishments in India. 

15 India’s ASI defines “workers” as all people employed directly or 

through any agency, whether for wages or not, and engaged in any 

manufacturing process or in cleaning any part of the machinery or 

premises used for manufacturing process or in any other kind of work 

incidental to or connected with the manufacturing process or the product. Workers engaged in repair and maintenance or production of fixed 

assets for a factory’s own use and workers employed in the production 

of electricity or coal, gas, etc. are included. This definition is deemed 

equal to the BLS definition of production workers, which is those employees who are engaged in fabricating, assembly, and related activities; 

material handling, warehousing, and shipping; maintenance and repair; 

janitorial and guard services; auxiliary production (for example, power 

plants); or other services closely related to the aforementioned activities. Working supervisors generally are included; apprentices and other 

trainees generally are excluded. However, the ASI definition includes 

workers who do not receive wages. This inclusion of some additional 

workers is not believed to significantly affect the BLS estimates of 

hourly compensation costs.

16 The states of Arunachal Pradesh, Mizoram, and Sikkim, and the 

union territory of Lakshadweep are not included in the geographical 

coverage of the ASI. The source of this information is Carl Haub and 

O.P. Sharma, Hourly Compensation Costs for Workers in India, November 2005, unpublished manuscript.

17 The Factories Act, 1948, Commercial Law Publishers (India) Pvt. 

Ltd., Delhi, 2006. 

18 The Collection of Statistics Act, 1953 (Government of India, 

Ministry of Law), on the Internet at www.mospi.gov.in/mospi_stat_

act53.htm (visited May 3, 2010).

19 The Factories Act, 1948.

20 For the 2007 NAICS definition of the manufacturing sector, visit 

the BLS Web site at www.bls.gov/iag/tgs/iag31-33.htm (visited May 

24, 2010). 

21 For information on NIC 1998 see www.mospi.nic.in/nic_98.htm

(visited May 3, 2010). Raw data for industries 0140, 1422, 2211, 2212, 

2219, and mining and utilities (industries 4000 to 4390) have been 

excluded from the BLS estimates.

22 Note that the data published in this article do not match data 

published by India’s CSO because of adjustments performed by BLS to 

make the data comparable with data calculated in a manner consistent 

with NAICS.

23 BLS has no information on the level of nonresponse to the ASI.

24 International Comparisons of Hourly Compensation Costs in Manufacturing. 

25 Amit K. Bhandari and Almas Heshmati, Wage Inequality and Job 

Insecurity among Permanent and Contract Workers in India: Evidence 

from Organized Manufacturing Industries, discussion paper no. 2097 

(Institute for the Study of Labor, April 2006), p. 3, on the Internet 

at http://ideas.repec.org/p/iza/izadps/dp2097.html (May 3, 2010).

26 Bhandari and Heshmati also point out that contract labor is not 

spread evenly across all industries within manufacturing. The ASI data 

support the claim of the Institute for the Study of Labor that laborintensive industries like the tobacco industry hire a high percentage of 

contract labor, whereas industries such as the pharmaceutical industry that require more capital and highly skilled labor hire a relatively 

low percentage of contract labor. According to published ASI data, in 
Monthly Labor Review • May 2010 21

2005–06 contract workers accounted for 68.3 percent of all production workers in India’s organized tobacco industry and only accounted 

for 31.7 percent of the production workers in the chemicals industry 

(which includes pharmaceuticals). As previously mentioned, contract 

workers accounted for 28.6 percent of all production workers in India’s 

manufacturing sector in 2005. 

27 The Factories Act, 1948, section 59 (1), states: “Where a worker 

works in a factory for more than nine hours in any day or for more than 

forty-eight hours in any week, he shall, in respect of overtime work, be 

entitled to wages at the rate of twice his ordinary rate of wages.” 

28 Carl Haub and O.P. Sharma, Hourly Compensation Costs for Workers in India: 1989-1990 to 1997-1998 and 2003-2004, September 2006, 

unpublished manuscript.

29 Although publishing is not included in the NAICS definition of 

manufacturing, printing is included in manufacturing under NAICS 

subsector 323: printing and related support activities. 

30 Data on the structure of labor costs are used to analyze relationships 

among various components of labor costs. For example, structure-oflabor-costs data can provide information on the percent of total labor 

costs that is accounted for by the cost medical insurance.

31 BLS was unable to locate data to serve as a proxy for pay in kind. 

BLS was unable to find conclusive evidence regarding what portion of 

total compensation pay in kind represents for the organized manufacturing sector, but it is believed to be small, and its exclusion should not 

significantly affect the estimates.

32 Employers in Indian manufacturing currently are not subject to 

any taxes or subsidies linked to the level of employment in their firms; 

therefore, this component of total compensation is zero. 

33 Interviews were conducted in New Delhi by Carl Haub and O.P. 

Sharma during a 7-day period in July 2006. Out of the 120 employers 

in Faridabad who were mailed survey forms, 10 employers returned the 

completed form and 15 addresses were found to be invalid. Haub and 

Sharma, Hourly Compensation Costs for Workers in India: 1989-1990 to 

1997-1998 and 2003-2004, September 2006, unpublished manuscript.

34 BLS calculated hourly compensation using an average of 9 hours 

worked per day to see how the change in working time would affect 

the estimate. The result was that the change in working time had little 

effect. When measured in U.S. dollars, mean hourly compensation for 

all employees was $0.81 in 2005 and was still equal to approximately 3 

percent of the U.S. level.

35 The Factories Act, 1948, chapter 8. 

36 The 10 paid holidays included in BLS estimates are: New Year’s 

Day, Holi, Id-ul-Fiter, Raksha Bandhan, Guru Nank’s birthday, 

Dusshera, Diwali, Ambedkar Jayanti, Krishna’s birthday, and Christmas. Some states observe more holidays than others; BLS chose to account for these major 10 paid holidays across all Indian states because 

they are those which function as paid holidays almost everywhere. 

37 Given that a manufacturer’s responsibility for employees employed by contractors, as well as its need to keep records of these employees, ends when the contract is issued, it is not possible to estimate 

any amount of paid leave that contracted employees may receive. This is 

especially true of work delegated on short-term contracts. In addition, 

it is not legally required that employers provide any paid leave to contracted employees. For these reasons, BLS assumes no paid leave for 

contracted employees in the hourly compensation estimates presented 

in this article.

38 Haub and Sharma, Hourly Compensation Costs for Workers in India, 

November 2005, unpublished manuscript.

39 India’s Pension Reform: Chronology of Events, Invest India Economic Foundation, on the Internet at www.iief.com/chronology.htm

(visited May 5, 2010).

40 In a 2006 paper, the Conference Board published an estimate of 

compensation per employee for India in 2002. See Bart van Ark, Judith 

Banister, and Catherine Guillemineau, Competitive Advantage of “LowWage” Countries Often Exaggerated, (The Conference Board, Executive 

Action Series, No. 212, October 2006), p. 5. The estimate is for “largescale manufacturing” only, which includes registered manufacturing 

enterprises only—that is, those enterprises in the organized sector. 

The Conference Board reports that Indian manufacturing employees 

received compensation at a level equal to 2.5 percent of the level 

of compensation in U.S. firms. BLS estimates put Indian hourly 

compensation at a level equal to 2.7 percent of the U.S. level in 2002. 

The small difference between these numbers is likely due to differences 

in estimation methods. One obvious difference is that the Conference 

Board estimates measure the ratio of annual compensation per 

employee in India to annual compensation per employee in the United 

States, whereas BLS estimates measure the hourly compensation ratio. 

The Conference Board estimates that large-scale manufacturing 

employed 7.8 million employees in 2002—which includes unpaid 

family members, sole proprietors, etc. BLS omits this group of 

workers and only considers paid employees when estimating hourly 

compensation costs. See Judith Banister, India and China: Demography, 

Human Capital, and Socioeconomic Transformations (The Conference 

Board, 2007), p. 27. Additionally, as mentioned earlier, BLS excludes 

employment and compensation data from the ASI for industries 

that do not fit within the NAICS definition of manufacturing. BLS 

estimates that there were 7.5 million paid employees in the organized 

manufacturing sector in 2002.

41 See “Table 1. Production Workers: Indexes of hourly compensation costs in U.S. dollars in manufacturing, 34 countries or areas and 

selected economic groups, 1975-2007” (Bureau of Labor Statistics, 

March 2009), on the Internet at ftp://ftp.bls.gov/pub/special.requests/ForeignLabor/ichccpwsuppt01.txt (visited May 5, 2010).

42 The industries with the highest levels of employment are not necessarily the industries that contribute the most to India’s position in 

the global economy, however. According to The National Strategy for 

Manufacturing, gems and jewelry, textiles and garments, engineering 

goods, chemicals, and leather and leather goods account for approximately 75 percent of India’s exports.

43 For a full list of the BLS international hourly compensation cost 

estimates for both all employees and production workers, visit the BLS 

Web site at www.bls.gov/ilc/ (visited May 6, 2010).

44 Michael Schuman, “The Drive to Compete,” Time, June 19, 

2006, on the Internet at www.time.com/time/magazine/printout/0,8816,1205526,00.html (visited May 6, 2010).

45 Gordon H. Hanson and Raymond Robertson, China and the 

Manufacturing Exports of Other Developing Countries (Cambridge, 

Mass., National Bureau of Economic Research, July 2007), on the Internet at www.nber.org/books_in_progress/china07/cwt07/hanson.

pdf (visited May 6, 2010).
Manufacturing in India

22 Monthly Labor Review • May 2010

46 Erin Lett and Judith Banister, “China’s manufacturing employment and compensation costs: 2002–06,” Monthly Labor Review, April 

2009, p. 32, on the Internet at www.bls.gov/opub/mlr/2009/04/art3full.pdf (visited May 6, 2010).

47 See the U.S. Census Bureau’s International Data Base at www.

census.gov/ipc/www/idb/ (visited May 11, 2010), click on “Data Access,” and select the country and years for which you would like to 

download data. 

48 Judith Banister, “Manufacturing employment in China,” Monthly 

Labor Review, July 2005, p. 11, on the Internet at www.bls.gov/opub/

mlr/2005/07/art2full.pdf (visited May 7, 2010).

49 Judith Banister, Manufacturing Employment and Compensation in 

China (Bureau of Labor Statistics, November 2005), on the Internet at 

www.bls.gov/fls/chinareport.pdf (visited May 7, 2010). 

50 Lett and Banister, “China’s manufacturing employment and compensation costs: 2002–06,” pp. 30–38. 

51 Ibid; and Banister, “Manufacturing Employment and Compensation in China,” pp. 26–47.

52 Barbara Demick and David Pierson, “People, people everywhere 

in China, and not enough to work,” Los Angeles Times, Mar. 28, 2010, 

on the Internet at http://articles.latimes.com/2010/mar/28/world/

la-fg-china-labor28-2010mar28 (visited May 11, 2010). 

53 The National Strategy for Manufacturing, 3.6.4, pp. 34–35. See also 

“The long journey,” an article published in the June 3, 2006, issue of The 

Economist. On page 11, Vineet Agarwal of the Transport Corporation 

of India describes the typical journey cargo must make between Kolkata and Mumbai. The 1,340 mile trip takes 8 days at an average speed 

of less than 7 miles per hour. More than 32 hours are spent waiting at 

tollbooths and checkpoints. 

54 “India urged to copy China in infrastructure spending,” The China 

Post, May 5, 2008, on the Internet at www.chinapost.com.tw/business/asia/india/2008/05/05/155047/India-urged.htm (visited May 

7, 2010).

55 “U.S. Imports from China by 5-digit End-Use Code 2005-2009” 

(U.S. Census Bureau), on the Internet at www.census.gov/foreigntrade/statistics/product/enduse/imports/c5700.html (visited May 

7, 2010).

56 Anand Giridharadas, “India, Known for Outsourcing, Expands in 

Industry,” The New York Times, May 19, 2006, on the Internet at www.

nytimes.com/2006/05/19/business/worldbusiness/19factory.html

(visited May 11, 2010).

57 “U.S. Imports from India by 5-digit End-Use Code 2005-2009.”

58 This information was obtained from The National Strategy for 

Manufacturing, p. 20; the original source is listed as “Learning from 

China to unlock India’s manufacturing potential” (CII-McKinsey, 

October 2002). McKinsey & Company undertook a study on behalf 

of the Confederation of Indian Industry (CII) in March 2002. The 

objective was to understand the drivers of Chinese competitiveness 

in manufacturing and identify how India could put its manufacturing 

sector on the path to high growth. BLS estimates indicate that in 2002 

hourly compensation costs in China were 22 percent lower than those 

in India, as shown in Chart 9. For reasons described in this article, estimates from China are not directly comparable with those from India. 

59 The National Strategy for Manufacturing, 3.3.2, p. 20.

60 Ibid, 4.2.2.12, p. 64. 

61 Statement 10. Summary of macro economic aggregates.

62 Geeta Anand, “India’s Infrastructure Funds Fall,” Wall Street Journal, Apr. 28, 2009.

63 Sobia Khan, “NHAI’s new bid norms may speed up road projects,” The Economic Times, Mar. 13, 2010, on the Internet at http://

economictimes.indiatimes.com/news/economy/infrastructure/

NHAIs-new-bid-norms-may-speed-up-road-projects/articleshow/5678094.cms (visited May 11, 2010); and “NHAI to invite fresh 

bids for 38 projects,” Business Standard, Apr. 15, 2009, on the Internet 

at www.business-standard.com/india/news/nhai-to-invite-freshbids-for-38-projects/58608/on (visited May 11, 2010).

64 John Lee, “Don’t Underestimate India’s Consumers,” BusinessWeek, 

Jan. 21, 2010, on the Internet at www.businessweek.com/print/

magazine/content/10_05/b4165084462859.htm (visited May 7, 

2010).

65 At the time this article was published, the CSO had released data 

from ASI 2006–07 and ASI 2007–08.