Produce competitively priced products for global market

June 26, 2014 7:15 am

Indian manufacturing sector needs to have a complete package of innovative products, reliable and lean manufacturing process, to produce consistent quality of the products
 Manufacturing activities across the globe have gone through a turbulent time during the past couple of years. However, India has shown sustainable growth in manufacturing through consistent focus on innovation and talent development. Gautam Ahuja explains how India is doing everything to establish itself as next manufacturing centre.
India is trying everythingIt’s not at all a secret anymore that growth in the coming decades will come from the developing world. As Chinese wages are going up and the labour market is getting tighter, India is trying everything to make India as the manufacturing hub of the world.
In order to woo foreign investments, the government has implemented many favourable policies. India has also a large working population and this can be a competitive advantage for labour intensive manufacturing. Not to forget India’s large domestic market, which has more than 600 million rural consumers.
Indian manufacturing sector needs to have a complete package of innovative products, reliable and lean manufacturing process, to produce consistent quality of the products. India has a large base of skilled workforce and engineers, and more are graduating every year. English as a medium of communication is understood by most, which is a strong asset for India. The focus should be on economies of scale to produce competitively priced products, for the global market.
Pushing factorsTo a large extent, manufacturing in India is dependent on the automotive and auto component industry. The outgoing government had already taken some steps to reduce the excise duty, to give manufacturing a push. Further, the RBI should reduce the CRR and Repo rates to increase liquidity, so that loans are available at a lower rate of interest. This will stimulate growth in a lot of industries. With the general sentiment also improving, it will lead to overall growth in the manufacturing sector.
Roadblocks in India In India there are many roadblocks if one wants to set up a manufacturing unit. Land acquisition laws need to be simplified, making it easier to start a new venture. The government should ensure smooth and uninterrupted supply of electricity. This will reduce the capital cost of installing generators or captive power plants, and also the running cost of generators leading to lower cost of manufacturing.
The labour laws also need to be simplified, since labour unions sometimes act as roadblocks rather than helping in the smooth functioning. Last but not the least, the large number of certifications and returns required to be filed, are a deterrent to fast growth.
Immediate actions needed by new govtThe new government should immediately focus on upgrading infrastructure with investments. This will have a salutary effect on other sectors and on the economy. The development theme should revolve around tackling inflation, job creation, curbing fiscal deficit and manufacturing resurgence. Along with the above, it is also equally needed to ensure that the Indian rupee is strong as compared to other currencies.
Dormer’s doorsDormer is one of the world’s foremost producers of solid carbide and high speed steel rotary cutting tools. Today, Dormer has its global presence with sales units in over 20 countries serving more than 100 markets worldwide.
Gautam K Ahuja, Managing Director, Dormer Tools (I) Pvt. Ltd.