In Breaking the Mould: Reimagining India’s Economic Future, Raghuram G. Rajan and Rohit Lamba argue that India cannot assume it can repeat the development path of earlier industrial economies by relying on low-wage factory work. Their case is that global supply chains, intense competition, trade frictions and automation make that route harder today. They do not argue that India should abandon manufacturing: they recommend building human capital, high-skilled services and manufacturing based on innovative products.
What Rajan and Lamba say has changed
The central question in the book is not whether manufacturing can contribute to India’s development. It is whether low-skilled, labour-intensive manufacturing can still serve as the broad, reliable route to growth that it did for some earlier industrializers.
The authors argue that the conditions are different now. Indian workers compete with workers in countries including Vietnam and China, while automation and global competition add pressure to industries that once depended heavily on low-cost labour. In their words, “Unlike the situation for early developers decades ago, Indian workers, adjusted for quality, will not be much cheaper than their competitors.” This is the authors’ assessment of relative competitiveness, not a new official labour-cost statistic.
The book’s publisher, Penguin Random House India, describes the broader challenges as intense competition in low-skilled manufacturing, rising global protectionism and growing automation. Those pressures, in the authors’ view, make it risky to assume that labour-cost advantage alone will draw production and jobs to India.
#1 Best Overall
Why global supply chains complicate manufacturing
Rajan and Lamba emphasize that many products are made through supply chains spanning multiple countries. A factory may import components, assemble them, and then export the finished product or an intermediate part. The price and reliability of the final good therefore depend not only on wages and factory productivity but also on how easily parts can cross borders.
A book excerpt published by Scroll uses a fan motor to illustrate the point. When production relies on components moving across borders, tariffs on imported inputs can raise costs, while tariffs on exports can make the finished product less competitive. Differing safety standards and border inspections can add delays or compliance costs. The authors argue that regional trade agreements can help reduce some of these frictions.
Rank #2
This is their explanation of important obstacles, not a complete diagnosis of every Indian industry. The balance of costs and opportunities can differ by product, market and supply chain.
What the book proposes instead of a low-wage-only strategy
The authors’ alternative is not “services instead of manufacturing.” They argue for investing in people and expanding higher-value work, while also developing manufacturing around innovative new products.
What’s actually slowing this PC down?
Pick the symptom - the matching free tool is one click away.
Rank #3
- Used Book in Good Condition
- Build human capital: Education and skills can help workers take part in more complex, higher-value activities.
- Expand high-skilled services: Rajan told The Week, “Services is where India needs to focus on.” In the interview, he connected this focus to higher-value activities such as intellectual property, content and creativity, including work linked to manufacturing.
- Make room for innovation: The publisher’s synopsis includes manufacturing centred on innovative new products, rather than treating production as a contest in low wages alone.
- Support institutions and decentralization: The publisher also highlights stronger democratic institutions and decentralization as part of the authors’ wider agenda. Rajan has presented democratic institutions as a potential advantage in creating space for ideas and creativity.
Read the recommendation as a shift in emphasis: compete through skills, ideas and higher-value production, not by assuming that inexpensive labour will be enough.
Why the strategy is contested
There is a serious counterargument about jobs and industrial capacity. In an April 2025 opinion essay for The Indian Express, Mao Keji argues that manufacturing remains important for populous economies and questions whether high-end services can thrive without an industrial base. That is a published opinion, not a settled consensus, but it highlights the practical concern behind the debate: whether services and innovative industries can create employment at the scale India needs.
The disagreement is partly about which advantages India should prioritize. Rajan and Lamba emphasize skilled work, innovation and the difficulty of competing in low-skilled manufacturing under current global conditions. The counterargument stresses manufacturing’s continuing importance and the risk of expecting services to stand alone. The available arguments do not, by themselves, establish which approach will produce better employment or growth outcomes.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Book details
Breaking the Mould: Reimagining India’s Economic Future is co-authored by Raghuram G. Rajan and Rohit Lamba. Penguin Random House India lists paperback, hardback and audiobook editions; format details and retailer availability can change. See the publisher’s book page for the current listing.
Do these 3 things before closing this tab:
1Clear out junk files and repair common Windows errors2Fix the driver behind crashes, sound loss and screen glitches3Repair Windows errors before they cause bigger problemsQuick Recap
Best Value
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
