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Can
India make its significant presence in
manufacturing sector? India is trying to come up
in big way both in direct manufacturing as well
as for providing manufacturing related services
starting from R&D, product development, design,
testing, prototype manufacturing, production
engineering, tooling, contract manufacturing,
and even efficient operation management
services. Some recent development in industries
is significant.
US-based diesel engine major Cummins expects to
source close to $500 million (about Rs 2,295
crore) worth of engines and auto components from
India by 2010 from its present base of $150
million (about Rs 688 crore).
Germany-based Bosch is expanding for the
manufacturing of high-end components such as
electronic stability program (ESP) and anti-lock
braking systems (ABS) in India in the coming
years. Bosch recently commenced the production
of common rail high-pressure pumps from the
company's Bangalore facility. Bosch has invested
close to Rs 550 crore for manufacturing common
rail diesel systems in India as part of the Rs
1,800 crore funds earmarked for the country till
2008. Against a high-cost location, India
provides the price benefits of manufacturing in
the range of 10-20%.
Consumer electronics and home appliances major LG Electronics India recently announced the
commencement of operations of its greenfield
facility for Optical Digital Devices (ODD) at
Ranjangaon, near Pune. The plant is the LG's
exports base. The ODDs manufactured here will be
used for exports predominantly to the European
countries. As reported, the DVD writer plant in
Ranjangaon is the second-largest DVD writer
plant in Asia with a capacity to produce 10
million DVD writers per year on a three-shift
basis.
Virtually every global phone manufacturer has
either set up or is setting up manufacturing
facilities here. Is India becoming a major
handset-manufacturing hub?
Even in newer sectors of manufacturing, foreign
manufacturers today look positively towards
India because of certain obvious advantages.
Haworth (India) Pvt Ltd, the wholly owned
subsidiary of Haworth Inc, one of the world’s
largest office furniture manufacturers, has
decided to make India its manufacturing hub for
Southeast Asia and the Middle East by 2010.
Many indicators are showing the reappearance of
India as major manufacturing nation.
Surprisingly, besides the obvious names like IT
majors Infosys, TCS, Wipro, Satyam Computer and
the Reliance Group, the manufacturing companies
such as Tata Motors, Bajaj Auto, TVS Motors,
Mahindra and Mahindra, Bharat Forge and Crompton
Greaves have also found place in the elite list
of 100 companies from the rapidly developing
economies prepared by the Boston Consulting
Group, a US-based international strategy and
management consulting firm.
With the background of huge maintenance and
services knowledge base as one of the largest
users of defense equipment for army, navy and
air force, railway and other transportation
related technologies, and advanced technologies
used in satellites, missiles, space and nuclear
technologies, India has a great potential to
become a big player in the product related
services An interesting news item shows how and
where India can make a mark. Recently, Rosoboron
service (India) has entered into an exclusive
contract with Oberonprom of Russia to offer
exclusive after-sales services for all Russian
helicopters currently in service including the
Kamov 25, 28, and 31 series with the navy; Mi 8,
17 and 26 with the air-force; and Mi series with
the army.
Oberonprom is an integrated helicopter
manufacturing company in Russia aims to become
one of the world's largest helicopter companies,
dealing with design, development, production,
sales, and servicing of all makes and types of
Russian origin helicopters.
General Electric (GE) is angling for contracts
to build maintenance and repair facilities in
the country and has bid for a huge defense R&D
organisation project. GE is in talks with
national carrier Air-India and state-owned
aircraft maker Hindustan Aeronautics Ltd (HAL)
to set up maintenance, repair and overhaul (MRO)
facility.
India has been the user and even manufacturers
of high tech products- aircrafts, high-end
computers, heavy-duty earth moving machines,
machine tools of many companies such as Boeing
and Airbus, IBM, Caterpillar, Komatsu, Hitachi,
and Mitsubishi. India has and can develop and
provide human resources for producer related
services. New entrepreneurs may develop
capabilities for repair and maintenance of the
products for the entire global market. Cost of
the human resources, knowledge of language, and
managerial skill will provide the competitive
advantages. Even with better supply chain
management, India can even become the hub for
the repair activities. Students from IITs, IIMs
and other institutes must get some orientation
for getting into these potential new sectors as
entrepreneurs. The government, CII, and FICII
can move in big way for attracting entrepreneurs
in this business that can create a huge
potential for employment.
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