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Cutting tool industry to bolster growth

Despite economic downturn, the demand for cutting tools in India is expected to bolster growth because of increased investment in infrastructure development
The cutting tools industry in India dates back to the World War II. A few British-owned general engineering companies, due to non-availability of imported tools, started manufacturing tools in India. With the start of industrialisation in a series of Five-Year Plans, India stands as one of the 20 largest producers of cutting tools in the world.
New millennium, new beginningSince the beginning of new millennium, the Indian cutting tools sector has had a stagnant growth as investment in the manufacturing sector slowed down considerably. In early 2002, when global majors started to outsource manufacturing to India, Indian manufacturing sector witnessed a spurt in demand for cutting tools.
Growth despite economic downturnNew analysis from Frost & Sullivan’s Global Machine Tools and Cutting Tools Market finds that the increased investment in infrastructure development in India is expected to bolster growth. According to the report, the demand for cutting tools is expected to grow in emerging economies such as China, India, Brazil and Russia, despite the economic downturn.
As more and more investments are coming in the automobile, aerospace and defence industries, the production of these tools will jump. Even the exploration of new oil and gas fields and the expansion of the mining industry are believed to impact the market.
Influence of aerospace industryAccording to the RNCOS report “Indian Aerospace Industry Analysis”, India is the 9th largest aviation market in the world. The civil aviation sector in India has recorded annual growth of over 41 per cent in passenger traffic during in the last 2 years. The growth of the aerospace industry, which hugely uses high-precision cutting tools, is the brighter spot for market prospects.
RoadblocksThough India has established itself as one of the leading manufacturers of cutting tools, the nation is not able to address the huge demand for technologically advanced, high-quality tools. Lack of local expertise is the biggest concern. Since long, German manufacturers have been helping here. Even the necessary advanced materials like nickel alloys and titanium alloys are very difficult to machine.
Research and developmentAs the user industry is looking for more advanced, high-quality tools, tool manufacturers are investing in R&D to develop tools that are coated with materials like titanium carbide, titanium nitride and aluminium oxide etc. These high-quality, coated tools can withstand high amount of heat produced, preventing tool deformation. The CII survey has revealed that more than 60 per cent of the companies have R&D departments and the industry spends on an average 1.9 per cent of its sales on R&D, which is quite satisfactory when compared to the other sectors of the capital goods industry.
With Index of Industrial Production (IIP) touching new highs and emphasis on capital investment by the government, the industry is all set to witness unprecedented growth.

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