During its expansion strategy, the company must consider factors like labor costs and availability, environmental laws, governmental laws, intellectual property safeguards, and reputation. This paper will compare and contrast these factors between Mexico and India and recommend the most suitable country for the company’s new manufacturing facility and the least suitable one.
Sustainable Environmental Regulations and Measures
India has a complicated regulatory system to control energy use, waste management, and pollution. To combat pollution, the government of India has passed regulations and laws like the Act of Air Pollution and the Act of Water Pollution. By 2030, the nation wants to generate 40 per cent of its installed electrical capacity from nonfossil fuel. In contrast, Mexico has implemented environmental regulations and laws to combat problems like water, air pollution, and soil (Rajmohan, 2019). The General regulation Law of Environmental Protection and Ecological Balance and the Climate Change and National Ecology Institute comprise the framework of Mexico’s environmental regulations. Both nations have policies and rules that are in line with the demands of the customers in aspect terms of sustainability.
Workforce and Cost
Mexico and India have sizable, inexpensive labor pools that include a sizable proportion of educated people. India has a mature industry of IT, and its personnel workforce has experience in the production of computer hardware. The nation also benefits from economies of scale, which lowers costs. On the contrary, the labor force in Mexico is very proficient in engineering and manufacturing, which appeals to businesses looking for a specialized workforce for top-value manufacturing operations (Mody, 2019). Mexico’s general cost of labor is more expensive than India’s general cost of labor.
There are various regulatory frameworks in Mexico and India. Foreign Exchange Management (FEMA) governs foreign investments in the state of India, and businesses must abide by laws, including the Companies Act of 2013 and the regulation of Labor Laws. Mexico is renowned for its pro-business policies and has a more liberalized investment atmosphere (Crepelle, 2020). The Federal law of labor and the Foreign law of investment comprises the nation’s regulatory structure. Although both nations have advantages, Mexico’s regulatory environment is more friendly to commerce and foreign investment.
The protection of intellectual property rights in Mexico and India has drawn criticism. Both nations have been added to the Watch Priority List for protecting intellectual property rights by the US Representative of Trade (USTR) (Mody, 2019). However, Mexico has ratified international IP accords like the Free Trade Agreement of North America, and India has considerably improved its IP rules. (NAFTA). Both nations have IP safeguards in place, but there is a greater chance of IP theft in India (Mody, 2019).
Mexico and India have experienced problems with the risk of outsourcing reputation manufacturing. Customers may object to companies outsourcing to India due to worries about quality control problems and employment loss. On the contrary, Mexico has had reputational problems because of worries about safety and security for foreign businesses doing business there (Rajmohan, 2019). Mexico also has a high percentage of corruption, which could harm the organization’s reputation.
I believe Mexico would be the most suitable location for the customer’s new manufacturing facility and Inda the least suitable. This is because Mexico has a significantly trained workforce specializing in manufacturing and engineering. Furthermore, Mexico’s regulatory climate is more friendly to businesses and has a robust environmental regulatory framework that meets the needs of investors concerned about sustainability. On the other hand, although India’s IT sector is established and benefits from market economies of scale, the country’s legal framework is complicated and more susceptible to intellectual property theft. Concerns about possible employment losses due to outsourcing and problems with quality control have also hurt India’s reputation (Mody, 2019). These factors hence make India the least suitable location.
Crespelle, A. (2020). White tape and Indian wards: removing the federal bureaucracy to empower tribal economies and self-government. U. Mich. JL Reform, 54, 563..
Mody, A. (2019). New international environment for intellectual property rights. Intellectual property rights in science, technology, and economic performance (pp. 203–239). Routledge
Rajmohan, K. V. S., Ramya, C., Viswanathan, M. R., & Varjani, S. (2019). Plastic pollutants: effective waste management for pollution control and abatement. Current Opinion in Environmental Science & Health, 12, 72-84.