Hafizzz
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India must gear up to compete with US in manufacturing: CII summit - Business Today
There is a new normal in the world of manufacturing that India needs to guard against. India, going ahead, will increasingly compete with the US, apart from China and other low-cost Asian countries.
Large-scale manufacturing , which had been offshored to China, has started 'reshoring' into the US on the back of shrinking labour cost differentials with other countries as well as the shale gas boom, which has meant cheaper energy for its manufacturing units.
The International Energy Agency, an autonomous organisation working on affordable and clean energy, said this month that lower energy prices will help the US reap an economic advantage while energy-intensive industries in Europe and Japan will be burdened because of higher costs.
The Boston Consulting Group notes that there is a "significant and imminent" threat to Indian manufacturers. The US has an advantage in manufacturing in sectors such as transportation equipment, chemicals, petroleum and coal products, computer and electronics machinery, electrical equipment and metals - chemicals, petroleum and coal products account for nearly half of all exports from India.
So what must India do? The Confederation of Indian Industry's manufacturing summit in Mumbai on Friday was replete with talk of increasing productivity while fixing bottlenecks that are beyond the control of private companies - issues such as logistics and infrastructure.
Joginder Singh, President and Managing Director of Ford India, pointed out that a truck can cover 250 kilometers in India in one day. The global standard is 600 km. To overcome logistical bottlenecks, the company uses a mix of road, rail and sea transport.
Besides fixing its infrastructure quickly, India also needs to sort out its regulatory regime. Introducing the Goods and Services Tax will help, for instance. Industry bodies have been arguing that the tax would improve supply-chain efficiency, reduce compliance expenses, broaden the tax base and boost exports.
There is a new normal in the world of manufacturing that India needs to guard against. India, going ahead, will increasingly compete with the US, apart from China and other low-cost Asian countries.
Large-scale manufacturing , which had been offshored to China, has started 'reshoring' into the US on the back of shrinking labour cost differentials with other countries as well as the shale gas boom, which has meant cheaper energy for its manufacturing units.
The International Energy Agency, an autonomous organisation working on affordable and clean energy, said this month that lower energy prices will help the US reap an economic advantage while energy-intensive industries in Europe and Japan will be burdened because of higher costs.
The Boston Consulting Group notes that there is a "significant and imminent" threat to Indian manufacturers. The US has an advantage in manufacturing in sectors such as transportation equipment, chemicals, petroleum and coal products, computer and electronics machinery, electrical equipment and metals - chemicals, petroleum and coal products account for nearly half of all exports from India.
So what must India do? The Confederation of Indian Industry's manufacturing summit in Mumbai on Friday was replete with talk of increasing productivity while fixing bottlenecks that are beyond the control of private companies - issues such as logistics and infrastructure.
Joginder Singh, President and Managing Director of Ford India, pointed out that a truck can cover 250 kilometers in India in one day. The global standard is 600 km. To overcome logistical bottlenecks, the company uses a mix of road, rail and sea transport.
Besides fixing its infrastructure quickly, India also needs to sort out its regulatory regime. Introducing the Goods and Services Tax will help, for instance. Industry bodies have been arguing that the tax would improve supply-chain efficiency, reduce compliance expenses, broaden the tax base and boost exports.
