Pricewaterhouse Coopers report: Building Strong Partnerships and India: A Manufacturing Destination Key Opportunities point out significantly the mammoth Manufacturing Genius of this Country.
The revival of the manufacturing sector has been a happy story in the country’s sustained economic growth. With a nearly 80 per cent weightage in the country’s industrial production the manufacturing growth rate has doubled in the last 5 years – from 6% in 2002-03 to a record 12.3% in 2006-07. Within the sector, industries such as machinery and equipment, food products, basic metals and alloys and chemicals have emerged as major growth drivers.
India is rapidly emerging as a force in manufacturing exports, with capital-intensive products featuring prominently”. And the best is yet to come. The manufacturing investments are the ‘first mile investments’ in as far as these are likely to be followed up by further investments to complete the projects and also for their further expansions.
The world’s top five mobile manufacturers -- Nokia, Motorola, Samsung, Sony Ericsson and LG – have all set up manufacturing facilities in India. India has become the second-largest market for Nokia in volume terms, displacing the USA. Nokia has gone ahead and set up a Special Economic Zone (SEZ) near Chennai as a developer. Nokia and many of its vendors have also set up their manufacturing plants in the SEZ which is used as a hub wherein the various suppliers of Nokia either manufacture or store their products and provide the same to Nokia as and when required.
Defying the traditional view that India is good only for services, the manufacturing sector in India has been moving up the value chain. While Hyundai is setting up a second car plant in the country, Toyota is exporting transmission systems from a new plant in Bangalore. The world’s largest auto parts’ maker, Delphi Corp, has relocated several product lines to India. So has Bosch, another auto parts giant. The phenomenon is not restricted to auto and auto-component firms alone. Companies like Unilever, Kodak, Whirlpool, Timex Watches, Cummins, Tecumseh, GE, ABB and Siemens are already sourcing products from their Indian plants for their global markets. And companies like Nokia and Elcoteq Network Corporation are considering setting up plants in India to meet their global demand for mobile phones.
India has a significant competitive advantage in the skill-intensive industries. Over the next decade, the global trend to manufacture and source products in low-cost countries is likely to gather strength. Taking advantage of this trend, India’s manufacturing exports could increase from US$40 billion in 2002 to approximately US$300 billion by 2015, leading to a share of approximately 3.5 per cent in world manufacturing trade.
If India is to achieve this quantum jump in manufacturing exports, several factors need to play their part. India’s manufacturing industry needs to adopt a global mindset and carefully select the product segments. The government needs to play its part by implementing key reforms in taxation, infrastructure, SEZs, labour and skill development.
No comments:
Post a Comment