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Time to make in India?

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Features, IMTEX Column

IMTEX 2015 ended on a high note with the industry willing to give the government another couple of quarters to see things moving  As the curtains come down on IMTEX 2015,

the industry not only rides a high wave of optimism but also celebrates the renewed focus on manufacturing industry like never before. With the spotlight on manufacturing there is already a sense of accomplishments and pride within the sector. “Never in the last 40 years has manufacturing sector drawn so much attention. Though there is little fundamental changes observed on the ground by the industry as yet, there’s a sense of recognition for being part of this sector which everybody is feeling now,“ said TK Ramesh, chief executive officer of Micromatic Machine Tools Private Limited.

Our interaction with over 30 business heads of various machine tool companies indicate that there are clear signs of revival of manufacturing sector which by the end third quarter in FY 16 would translate to real business for the machine tool sector. IMTEX 2015 ended on high hopes for the industry which is evident by everyone willing to give the government another couple of quarters to see things moving.

However, beneath the wave of high optimism, which is currently driven by sentiments, there is a sense of cautiousness which is catching up due to delays in structural reforms, less clarity on Make in India blueprint and regarding the ordinances passed. The success of these are crucial barometers for the success of government which is desperately trying to revive the industrial output and economy back on track.

Our question on reforms and challenges gave us answers which were anticipated, often repeated and of course some inspiring. Reforms in taxation, labour, land acquisition and incentives for automotive and power sector which are key drivers for the machine tool industry were common expectations from the industry.

“With so much of promises towards digitising India, the industry is keenly looking for implementation of a robust e-platform for tax and related documentation to enhance the ease of doing business,” said Manas Majumder, general manager, sales, at Walter Tools.

“Though the industry leaders have envisioned great plans for their expansion, excessive dependence on foreign suppliers for critical technologies had always been a challenge which needs collaborative efforts amongst industry, academia and policy makers,” said Syed Amjed, senior vice president, marketing, at Bharat Fritz Werner Limited.

Thought provoking remarks on innovation, cost of capital and ease of financing which are perhaps bottlenecks for Indian manufacturing Industry per se also came up during discussions. High cost of capital has a cascading effect on all areas of business – R&D, expansion, technology and human resource development.

With FDI and private participation across defence, aerospace and shipbuilding the industry is keenly watching the effectiveness of offset policies envisioned by the government and their roll out. The sector which has long been facing human resource challenges due to migration towards other industries hopes that the renewed focus on manufacturing the sector shall be able to attract and retain talent which is a crucial challenge for the sector.

It is note worthy to mention that companies to overcome this challenges have set up in-house training centres to groom, train and hire people from economically backward segment and thereby created a very positive socio-economic impact in the surrounding areas. With associations and academia playing proactive roles towards skill and man power development through their training programs and initiatives, we expect that the engineers are equipped with hands on skill and are readily employable by Industries in coming years.

Make in India which is remarkable but equally debatable due to unclear conceptualization and challenges in the VUCA (volatile, uncertain, complex and ambiguous) world of business. Needless to say, effective execution of these concepts will have a tremendous positive impact on the overall economy, particularly end user sectors of the machine tool industry. There is a vision and a direction which requires collaborative efforts to find a way out of this maze.

The author, Manish Kulkarni, is executive director, BDB India Private Limited. He can be reached at mk@bdbipl.com.

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