Making ‘Make in India’ Work
Ever since the government launched the Make in India campaign on September 25, 2014 it has been making headlines. After all, the ambitious plan seeks to make India a manufacturing superpower. In almost two and half years since its launch, the campaign has undoubtedly received an overwhelming response with many national and international corporations pledging support.
For our 16th anniversary issue, Shweta Nanda, Assistant Editor, ER spoke to the leading companies committed to the initiative. These companies from across industry segments tell us how they are doing their bit in supporting the initiative, major challenges and the steps to take the campaign to the next level. Edited excerpts:
Having a global expertise and experience in control, power and data products, Lapp Group is confident to have a significant position in the Make in India drive. Lapp India has 70% of its product sales from manufacturing locally. Our two plants meet the growing needs of Indian customers in the textiles, automation, automotive and machine tools industry. These segments along with oil & gas, renewable energy, steel, cement, F&B, RAIL are the key drivers for growth.
Our factory in Bengaluru is producing customized products for industrial projects segment and Bhopal factory makes standard products for OEM customers. Lapp Group is gearing up further with capacity addition in existing plants to meet the demand from our customers by adding more customers to its portfolio.
Emphasis needs to be on attracting global companies
While Make in India is a great initiative, the effect can be seen in automotive and to an extent in the automation segment. That said, the impact is yet to be felt in industries like machine tools, F&B which are a key driver for other industries.
To take the initiative to the next level, India should attract global companies which have the capability to deliver large projects that support semiconductors, machine tools, automation in metals & mining, development of infrastructure to manage sea ports to develop India as
a global hub for trading.
In an economy where manufacturing is given importance, it adds to the growth of the GDP of the country significantly. China’s manufacturing contributes around 51% to its GDP whereas manufacturing in India has only 17% share to the GDP. For the growth of the Indian economy, it is essential to encourage Indian companies to manufacture in India. Make in India campaign promotes and encourages that. The campaign has not only helped in generating significant amount of employment but has also uplifted the living standards of the citizens.
Due to the aggressive launch of the campaign, it has given push to creating state-of-the-art manufacturing infrastructure. It will rejuvenate the industry by providing better tax incentives to the investors interested in manufacturing in India.
One of the companies which has grown exponentially based completely on the model of Make in India and is selling products across geographies is Patanjali. India is known as a land where birth of Ayurveda took place. Patanjali has successfully capitalized on that, ultimately making it one of the fastest growing FMCG companies of the country.
With the advent of increase in manufacturing in the country, the country will get a chance to be hands on with the latest technology and innovations. Not only will this affect the core production of the products but will also bring out another arm to this segment: services and repairs. If a country doesn’t have manufacturing within, it can never develop services and repairing as a main segment.
Our company through our five major business verticals contributes to Make in India in a big way. Energy Cables up to 220 kV, EHV Projects and Services, Solar Energy Solutions, Power Equipment and Retail Energy Products are five major verticals in which Ravin Group operates where manufacturing and assembling is completely done in India.
We are one of the largest exporters of power cables from India with exports to around 53 countries. We believe that Make in India policy should be extended to “Make completely In India for the world” for the prosperous growth and development of the country.
Roadblocks to Make in India Drive
We believe that major challenges that are faced by the industries across verticals are common. Currently these challenges revolve around finances, availability of poor infrastructure and scarcity of skilled labour.
We as a company with our more than six decades of real experience of the industry have helped in mitigating lot of such risks and challenges. Fortunately having a strong background and an old lineage we have perhaps saved ourselves from some of the major problems that industry is facing like the non-availability of the right kind of skill set. We have also dealt with skilling issues to an extent by associating ourselves with projects like Skill India and Will to Skill from time to time. These associations have helped in morphing the right skill as per company and industry standards.
However, the problem of finances and infrastructure remains. The customers in the power sector are in dire straits in terms of finances, and this puts a strain on the demand as well as industry profitability.
Need for policies to safeguard MSMEs
With multinationals coming in the country, these large companies can create a lot of challenges for MSMEs in terms of finances, competition, technology and infrastructure. Government should create a policy where the existence of the MSMEs is not threatened by these large multinational players, especially due to finance.
The thrust of the current government and focus on infrastructure, especially power, railways, roads and airports, coupled with the advent of GST, are steps in the right direction and are expected to mitigate some of these disadvantages.
Make in India initiative has clearly boosted the sentiments of the entire manufacturing sector in India. FDI inflows in India’s manufacturing sector grew by over 80% year-on-year to $16.13 billion during April-November 2016, according to IBEF. The initiative has helped make the entrepreneurial process, regulatory affairs and government guidelines more easy and friendly for the investors.
Along with the economic impact, I believe it has a tremendous effect on the morale of the Indian manufacturing community. It has created a fresh hope and confidence in the sector to establish India as a leader in the global manufacturing environment.
Positioning India as an export hub
Make in India itself is a brand to be reckoned with. With government initiatives to promote this abroad as well, the global markets are now cognizant of the capabilities and strengths of the Indian manufacturers. The strong FDI inflow has created several opportunities for Indian manufacturers including technology transfer, contract manufacturing, and joint ventures. Make in India has positioned India as an export hub. Several multinational companies, especially in the automotive sector, are eyeing exports of products from India based on the pure economics, abundance of skilled labour and ease of business. This opens up a lot of opportunities for SMEs to support the increasing demand.
We at ElectroMech are passionate about Make in India and are aligned with the vision for this initiative. As a part of our joint venture with Zoomlion (Chinese tower crane manufacturer), we manufacture tower cranes in India. The manufacture of cranes in India and not China, was a competitive option for our JV. We see this as a trend, where global majors in the crane manufacturing sector are providing world class products through their Indian partners and suppliers. This trend makes Make in India initiative more rewarding.
We have a strong presence in around 50 countries through our offices, dealer networks and installation bases. Within a short period, we have been able to deliver more than 500 cranes in Middle East region alone and have supplied several cranes to countries in Asian and African region as well.
Infrastructure development key to Make in India success
Make in India is one ambitious project driven by the Govt. of India and is aimed to make India a preferred destination for business. However, India has a lot of infrastructural bottlenecks.
To emerge as an able competitor to China, our Government must provide the much-needed impetus to infrastructure development. This would mean taking measures to ensure necessary development takes place in an accelerated and cohesive manner for the success of the initiative.
At RR Kabels, we are totally committed to the Make in India campaign and have been manufacturing a colossal range of wires and cables for varied industry segments. We are focused on further expanding our capacity and have earmarked an investment of Rs 150 crore for the current financial year.
The Make in India campaign has given the much required push to the overall manufacturing sector, not only at the operational level but also at sentiment level. Talking specifically about the cables industry, the government’s inclination towards renewable energy is slated to catapult the cable industry. The government is investing heavily in wind and solar energy, which in turn will drive the cable consumption in these industries. Further, with Power Minister Piyush Goyal looking to have all-electric car fleet by 2030, cable industry is sensing huge opportunity from the electric vehicles segment.
Make in India has already started showing some results, for instance, there is improvement in ease of doing business. There is a noticeable difference in the speed of getting an approval. Also, getting finance from bank is easier due to availability of money post demonetization.
Strong requirement for monitoring cable quality standards
To take the campaign ahead, the government needs to curb ‘electrical terrorism’ in the country. While the government is focusing strongly on energy saving aspect in cables, there are no policies and guidelines around the safety and quality of the cables. Around 85% of the fire in the world is caused by electricity and most of these are due to poor quality wire and cables. In my opinion, similar to 5-start products for energy saving, there should be a separate category indicating 5-start products for electrical safety.
Skill development is another area that needs attention and government has already started taking steps in the right direction with the Skills India campaign. With the current slump in IT, talent is expected to move to production. Given this scenario, we are expecting that in 5-6 years’ time we shall have a broader pool of employment-ready workers to meet the requirements of the industry.
