India Manufacturing Talk

News and Views on Manufacturing in India

India Manufacturing Surges in August

A recent article in Automation World, freelance journalist Uday Lal Pai has put down some positive figures based on industrial output as of August 2009.  Manufacturing output is expected to be at 8% for the year ending March 2010 and Industrial Production (IIP) has grown 10.4% YOY as of August 2009 – the highest its been over the past 22 months.  Indian Government officials have been quick to claim that the worst might be over for the Indian economy based on these strong numbers.

“It (industrial growth) is a good sign and it is a process of recovery.  We are hoping that when the final figure for the second quarter (July-September)is available, there will perhaps be some higher growth.”


Government Plan for Auto Component Manufacturers

In what is perhaps the only whiff of this, The Financial Express ran this article on September 4th which I had completely missed out on.   What was interestingly pointed out was that the government was working out a scheme to help auto component manufacturers who largely come from the SME segment.  Some excerpts from the article had some very encouraging remarks from the Heavy Industries and Public Enterprises Minister, Villasrao Deshmukh at the ACMA Annual Conference;

My ministry is examining the feasibility of having a separate scheme that can facilitate financing to the sector, as most small and medium auto component enterprises rarely have the means to raise the required resources on their own


Visionary Leaders for Manufacturing

A recent press release from the Confederation of Indian Industries (CII) announced the launch of a pilot programme – designed under the CII Mission for Manufacturing Innovation – to develop Visionary Leadership in the SME segment.  Citing figures of 14% growth in the Indian manufacturing industry and the need to sustain this growth, the report states that Indian manufacturing needs transformation through policy changes, infrastructure development and a strong thrust on building competitiveness.  An important aspect of developing competitiveness is the development of a set of Visionary Leaders capabale of Innovation and Breakthrough Thinking that will result in future concepts and products and in the process transform the Indian Manufacturing Industry.

The Visionary Leaders for Manufacturing (VLFM) Programme as it is called is focused on meeting this requirement by developing at least 200-250 Visionary Leaders in India in the next two years. It is designed to be the most advanced and innovative management education system especially devised for creating the future leadership. The VLFM is a national programme to develop Leaders in Manufacturing under the Indo-Japan Cooperation Agreement 2006, signed by the Prime Ministers of India and Japan. It is a partnership between the Indian Industry, Academia, the Indian and the Japanese Government. The collaborating institutions include:


Rising Prices of Inputs Hamper Auto Component Manufacturing

The India manufacturing slump story has been in the news over the past few months as rising interest rates and fuel prices hit the auto industry making life difficult for auto majors and their suppliers. The auto component industry has been hit with rising steel costs, along with the deprecating dollar. Industry news reported negative growth in December 2007 with component manufacturers unable to pass on the burden to their customers who typically were willing to take on only a partial burden.

ACMA was among the more vocal players on asking for intervention by the government to curb rising prices. According to ACMA President Sanjay Labroo, the component industry risked losing share both in domestic and international markets unless the government intervenes to control rising steel prices.


Micro, Small & Medium Enterprises Development Act, 2006

It’s a good idea to bring a good thing back on to the front burner. Specially when it involves the little guys. Private sector manufacturing is one of the vital elements to the turn around in the manufacturing economy in India. The Indian government plans to encourage small and medium scale enterprises to form clusters to power economic growth.

In a recent press release from the PIB, the Small and Medium Enterprises Development Bill 2005 which was enacted in June 2006 was renamed “Micro, Small & Medium Enterprises Development Act, 2006”. The Act aims at facilitating the promotion and development of small and medium enterprises. One of its primary objectives, according to the press release, is to make provisions for ensuring timely and smooth flow of credit to small and medium enterprises. The earlier concept of ‘Industries’ has been changed to ‘Enterprises’ which have been classified as:


When State Govts boost Manufacturing Support

When it comes to support for manufacturing in the auto sector few governments in the past could upstage Maharashtra and Tamil Nadu in attracting the cream of manufacturing. The areas around Pune and Chennai have been preferred over the years for their infrastructure and support for the manufacturing industry. Gurgaon on the outskirts of New Delhi is another prime example of this magnetic attraction that established manufacturing locales have for investment. Credit should then be given to enterprising politicians and bureaucrats who have managed to rock the boat just enough to spread wealth into their regions.

The Rajasthan State Industrial Development & Industrial Corporation (RIICO) has plans to establish Bhiwadi in Alwar district on the auto sector manufacturing map. RIICO has already succeeded in attracting significant number of auto component manufacturers. Companies like Caparo Fasteners, Federal Mogul, Hi-Tech Gear, Amtek and Continental Engines have established facilities in Bhiwadi over the past few years. The Rajasthan auto cluster near Alwar is the third of its kind after Pune and Chennai and will produce about 60% of passenger car vehicles, 55% of motorcycles and 25% of tractors manufactured in the country.


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