After IT, it’s time to take another big step

June 26, 2014 5:53 am

Vietnam or Indonesia are creating strong competition to India as they are also trying to build up their manufacturing sector
Firmly focused on the continuous development of full-featured, location-aware solutions, NNG is committed to provide excellence for its business partners and end users alike. Enjoying some of the best premier automotive manufacturers as business partners, NNG’s primary business objective is to become a leading global automotive supplier. Peter Bolesza talks about the pros and cons in accelerating Indian manufacturing sector.
Competitive environmentMore and more companies that require a lot of inexpensive factory workers are facing difficulties in China. Some factors like growing wages, changing labour law are making it difficult and less profitable for big manufacturing firms to operate in China. This situation is making such companies to look for alternative solutions in the South Asia region, also investigate possibilities in countries like Vietnam or Indonesia. These countries are creating strong competition to India as they are also trying to build up their manufacturing sector. India is trying to get into this field for a long time now, targeting to change the perception of the country.
Ray of hopeThe planned Delhi-Mumbai Industrial Corridor (DMIC) looks really good on paper. However, its execution is more important. As this project highlights, major encouraging factors are the availability of stable water supply, electricity, proper transportation and logistics facilities and labour law/taxation as well.
It would be good if Indian government continues its efforts to convince the foreign sources, especially American and European companies.Not to ignore, huge working population of India can be a competitive advantage for labour-heavy manufacturing. India has already shown its capability to succeed in IT and service outsourcing industries, now it’s time to take another big step.
Present challengesNo doubt the biggest obstacle here is the low level of infrastructure. Inflexible labour law and the difficulties in taxation are some major drawbacks when someone is considering their investments into this region.
In addition, water supply, electricity, transportation are all serious blocking factors. For example, a truck carrying goods from Gurgaon to Mumbai has to pass through 36 checkpoints and consumes around 10 days to reach its destination. Such poor connectivity leads to high logistics costs, increasing lead times.
Though road is the most inefficient, expensive and emissions-intensive mode of transport, 57 per cent of goods in India are transported by road, while the figure in China is just 22 per cent.
How does NNG look forward?Being a navigation software company, NNG admits that it is indirectly affected by all the issues mentioned earlier. However, the company believes its purpose to bring its knowledge to India. It wishes to create products that can help companies and individuals to find and reach their destination, and also make and execute proper logistics plans in this ever-changing environment.
NNG’s roadmap is very clear: find the best Indian companies to work with in the GIS or auto industry sector, and develop the products to a level where they can become commodity products for India.
Peter Bolesza, VP of Eastern Europe and Emerging Markets, NNG LLC