Globalising Indian manufacturing
June 30, 2015 3:29 pm
Incorporated in 2011, Wohlhaupter India Pvt. Ltd., is a wholly-owned subsidiary of Wohlhaupter GmbH – the pioneer in boring applications since 1929 and one of the world leaders in digital boring tools. Wohlhaupter is a manufacturer of modular tooling systems, boring and facing heads, clamping tools, standard tools and customised solutions for machining centres and millturns.
Here, Keshav Khurana, Executive Director, Wohlhaupter India Pvt. Ltd. talks about how Indian companies will gain from ‘Make in India’.
Sharing his views on the ‘Make In India’ initiative as far as machine tools industry is concerned, Mr Khurana said, “The ‘Make in India’ initiative will definitely bring down the costs to end customer. Delivery times too will come down. In the end, customer will be happy with cost and delivery but we need to see how good the raw materials and process adoptability in India we can get as compared to what we get abroad.”
The industry awaits a positive approach of the market. Mechanical engineering firms are forecasting production growth of 2 per cent in 2015 at the global level. Still it is not good enough for dynamic development. Various factors are affective at global level. Three top export markets namely France, Russia and Italy have regularly been source of negative headlines. However, the European market mainly Germany and American markets are very much positive, Mr Khurana said. He observed that ‘Make in India’ will really help the industry to adopt and bring foreign qualities in India to compete with global players.
How can ‘Make In India’ achieve successThough a lot is being discussed on the ‘Make in India’, hardly there are any discussion at the industry that how this vision can be realised. Sharing his expertise on this aspect, Mr Khurana said, “The government has to keep providing monetary benefits and subsidies to the manufacturing sector to make it lucrative as a step towards reduced investment costs.”
The government unveiled a 5-Year plan for lifting India’s exports in a policy that seeks to make the country a bigger player in global trade by doubling overseas sales to € 765 billion ($ 900 billion) by 2019-20 while giving a boost to the Make in India initiative. The simplified Foreign Trade Policy (FTP) for 2015-20 collapses five earlier schemes for promotion of merchandise goods into one single programme and revamps one for promotion of services. It focuses on reducing transaction costs for exports besides extending incentives to Special Economic Zones (SEZs) and e-commerce.
Focus on customer benefitsUneven and unexpected turns in the economy are projecting a cautious approach for the manufacturers and consumers both. Manufacturing in today’s competitive world is seeing a stiff competition. With the economy undergoing ups and downs market is not stable and needs are varying on day to day basis. “The success is all about what different can be given to customers in a way which exceeds his quality expectations and matches his cost requirements,” Mr Khurana said. “Wohlhaupter India’s approach to this is providing the best quality to its customers in a cost effective way.”
Govt must address industry concerns The Indian economy is projected to clock a growth rate of 7.4 per cent in the current financial year and is likely to improve further to 8.3 per cent by 2016-17. The GDP growth in the first three quarters of the current fiscal year ending March has averaged 7.4 per cent y-o-y – an improvement over the previous year and the trend is likely to continue in the coming months as well. The RBI is likely to cut rates by another 25 bps by June, but it has to be cautioned that the space for more aggressive rate cuts is constrained by the RBI’s explicit mandate to bring the inflation rate to the mid-point of the 4 per cent, +/-2 per cent band by early 2018. In March, the RBI surprised markets by reducing the benchmark interest rate by 0.25 per cent to 7.5 per cent on the back of softening inflation and the government’s commitment to continue the fiscal consolidation programme. This was the second time in two months that the RBI cut interest rates outside the regular policy reviews. Last time in January, it had cut the repo rate by 0.25 per cent to 7.75 per cent.
Subsidies, tax benefits and win-win labour laws will go as a help towards promoting domestic manufacturing. However Mr Khurana feels the most important for government is to focus on infrastructure growth which is not in line with requirement of a developing country like India. “Other major issue is to address the unemployment of talent available in India,” he adds.
Shining days aheadWhile talking on the initiatives taken by Wohlhaupter India in line with ‘Make in India’ initiative, Mr Khurana said, “Indian market has shown us positive picture – a manufacturing setup for supporting accessories of our main products maybe on the cards.”
Wohlhaupter India has charted out its year 2020 plan considering the economy and industry movements to take the roadmap ahead. “Definitely we are moving ahead in line with plans to see a bright future of Indian industries and demands as a global manufacturing hub,” Mr Khurana asserts.
_____________________________________‘Make in India’ will really help the industry to adopt and bring foreign qualities in India to compete with global players.
Keshav Khurana, Executive Director, Wohlhaupter India