The Hindu Business Line : Indian wages cheaper than Chinese

INDIA could prove more cost competitive than China for multinational corporations planning lower-cost operations in Asia on account of cheaper wages, especially for skilled professionals, according to a survey by Mercer Human Resource Consulting.

The survey of 600-odd companies in both countries shows that for nearly 95 per cent of the 42 job roles examined, average base pay is higher in China than in India.

While the differences in pay are less stark at lower levels, senior managers and professionals in several sectors in China earn more than twice as much as their counterparts in India. According to the survey, professionals such as HR managers in China earn $32,000 (Rs 14.7 lakh) on average, compared to $15,100 in India, while project managers and financial analysts earn $23,400 and $13,200 respectively in China compared to $10,000 and $8,400 in India. At the lower end of the salary scale, customer service assistants receive $2,400 a year in China compared to just $1,600 in India, while skilled production workers earn $2,300 compared to $1,900 in India.

India catching up: Salaries in India, however, are catching up with Chinese levels.

The average pay increase in India over the past five years was 11.5 per cent as compared to 7.5 per cent in China.

India currently has the largest population of English speakers outside the US.

"China and India have become prime locations for investment by multinational organisations because of their skilled labour and low wage costs. Companies are increasingly looking to outsource their back-office operations to these countries to reduce overheads.

"While it is far cheaper to employ staff in both China and India than Europe or the US, India appears to have the advantage of slightly lower wage costs," Mr Mark Sullivan, Worldwide Partner at Mercer, said.

But, he added: "Although wage costs are lower in India, there is a high demand for skilled workers there, particularly at the executive level.''

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