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The trailblazers of the manufacturing trail, China, Singapore and Taiwan have
captured over $100 billion in exports. India lags far behind, and will continue
to lose out, unless the government makes some quick course corrections. As India
sets international benchmarks in the industry, our country has to recognize the
primary principle that drives markets worldwide– "what helps people,
helps business".
It is a misconception that specialised manufacturing is not successful in
India. Take the example of Moser Baer–in its 20th year of operations, the
company has made its mark in as complex a market as optical media. It has
emerged as one of the largest optical and magnetic media production companies in
the world. MBI today is globally competitive in high technology manufacturing as
we have effectively leveraged our large knowledge pool and developed our own
processes. Availability of low-cost and skilled manpower, coupled with low costs
of setting up infrastructure and exemplary project implementation skills are the
key reasons for MBIs success in manufacturing.
India has the potential to emerge as a leader in the manufacturing industry.
Some of the factors that will support India are as follows. India boasts of a
very strong intellectual expertise with committees like CII, FICCI, and MAIT
working closely with the manufacturing sector. This has provided a very
close-knit association with constant interchange of ideas and recommendations
between the manufacturers, the industry bodies and the government of India.
India has excellent manpower utilization skills, primarily attributed to
availability of highly skilled and cost effective manpower/workforce. In the
last decade, the opening up of the economy has meant increased competition, and
the manufacturing sector has been undergoing a process of deeper structural
changes to adapt to the changing scenario. This can also be seen from the fact
that, despite the industrial slowdown, the manufacturing sector performed well
which is reflected in the sector rising share of exports.
However, the above mentioned factors only cater to preparing for a long
journey that is yet to be made. The most basic requirement to transform India’s
manufacturing industry dream into reality is to gain government acceptance. Our
country must identify the industries in which we have tremendous potential and
can excel in order to build truly world-class companies. The next requirement
would involve the creation of a more conducive environment to attract more
amounts of foreign direct investments into India, thus entailing the creation of
infrastructure, and rationalization of duties. The government will also have to
commit seriously to certain investments such as setting up of EPZs (export
promotion zones) or SEZs (software export zones). The governments at the centre
and the states as well as political parties have to ensure that the consensus on
reforms translates into implementation. At the same time, industry –and the
manufacturing sector in particular– have to intensify efforts towards building
up internal competitiveness by adopting global best practices in quality,
productivity, corporate governance, etc.
The task of building our industry, brick by brick, is one that is challenging
and arduous. The need of the hour therefore is for the entire country, to come
together in order to establish India as a quality conscious, globally
competitive and high potential destination.
By Deepak Puri
The author is managing director of Moser Baer India