RANIBAGH, India—In the ghostly reception area of an HMT Watches Ltd. factory, decorated with a space-age chandelier and a conversation pit—relics from a groovier era of Indian industrial optimism—the wall clock reads “8:15.” It’s actually closer to noon.

Out on the factory floor, Narayan Singh Khanayak sits at his work station, staring at another dead wall clock. He installs crowns on wristwatches, but there are none to install right now. Asked why he would be staring at the clock, he says: “You’ve got to look somewhere!”

...