Local companies should accelerate

June 26, 2014 6:41 am

Local companies should be able to achieve large volumes and economies of scale like China. This cannot happen only with domestic demand
DesignTech Systems is one of the leading CAD, CAM, CAE, PLM, RPT solutions, additive manufacturing technologies, and engineering services provider from India. Vikas Khanvelkar analyses the current situation of Indian manufacturing sector and its place in the competition being faced.
Need promising initiativesIndia can definitely become a global manufacturing giant and ‘Made in India’ mark can certainly give China a run for its money. This can happen if India incorporates some initiatives. There is a need like never before to help generate skilled and trained manpower. Undeterred power and water supply, availability of industrial land at affordable rates are fundamental essentials to set up manufacturing plants. As power cuts take a huge toll on productivity and profitability and hence adequate power generation facilities are needed.
Important factorsIt can be said that India is well placed in high value add design and engineering services as compared to most of the other competing countries. Now local companies should be able to achieve large volumes and economies of scale like China. This cannot happen only with domestic demand. So to increase exports, these companies should be helped to become globally competitive.
Labour laws should be made easy and infrastructure like road and rail connectivity needs to be improved. And of course availability of uninterrupted power is also a must.
Major roadblocksThe major roadblock industry is facing today is competition from China. Local manufacturing will only grow if ‘Made in China’ products don’t find their way to India markets. However, many Indian companies are still afraid of investing into manufacturing as they fear they won’t be able to survive the competition posed by China. This is because currently there are not many policies to encourage local manufacturers and insulate them from China’s competition.
Do’s for govtGovt needs to introduce policies and initiatives that will encourage the local industry to expand or engage in manufacturing line of business. Some of the do’s for it are:• Curb the import of Chinese goods. Impose additional taxes on the Indian companies who get their products manufactured in China• Give initial subsidies or tax concessions to companies to start manufacturing in India• Encourage exports of Indian made goods• Reduce multilayer taxation like VAT, CST, sales tax, service tax, LBT, Octroi or entry tax etc. Need to have only one tax like GST.• Establish skill development institutes and start prolific vocational skill development courses in existing universities• Improve necessary infrastructure development i.e. electricity, water supply, dedicated land• Put policies in place and ensure strict implementation: compliances to environmental norms, standard of working conditions, labour policies.
Roadmap for DesigntechDesigntech’s roadmap is to continue help product design companies to bring their products to market faster and optimise the costs to be globally competitive. This will help India become global R&D centre as well as manufacturing hub. DesignTech has signed up with Gujarat govt to set up 5 centres of excellence in association with Siemens, to train the students of Siemens PLM software.
Vikas Khanvelkar, MD, DesignTech Systems Ltd.