India under Modi has promised “to push manufacturing to 25% of GDP, and through the Make in India initiative, Modi wishes to make India a global manufacturing hub.” Have we seen some good things happening that brings hope? Yes, I am getting hopeful. Three recent manufacturing sectors provide a lot of positive news reports.
1. Railways: Indian Railways last week awarded contracts to General Electric Co. (GE) for setting up plant to manufacture of diesel locomotives at Marhora and Alstom SA to set up factories for electric locomotives at Madhepura, in Bihar. Alstom that has already a strong footprint in engineering and manufacturing and supply chain in India, plans to procure about 80% of the parts from India. It means good business for many local vendors. It will cost Rs 2,052 crore for setting up the diesel locomotive factory at Marhora, the electric one will cost Rs 1,293.57 crore at Madhepura. What required is a closely assisted implementation plan? Both the central and state government must must facilitate to remove all usual hurdles such as the infrastructure requirements and trained human resources to complete the project in fastest time. The project can change the region totally if everything goes right.
2. Aeroplanes: Only few days ago, Boeing Co. and Tata Advanced Systems Ltd has formed a joint venture that will manufacture aerostructures for aircraft and collaborate on integrated systems development opportunities in India. The joint venture will initially create a facility to produce aerostructures for the AH-64 Apache helicopter and to compete for additional manufacturing work packages across Boeing platforms, both commercial and defence.“ Tata Advanced Systems is one of the select few in the private sector in India undertaking manufacturing and assembly of both aircraft and helicopters. The resulting scale and expertise at which the company now operates makes it well-positioned for large-scale systems integration work in India’s aerospace and defence sector.
In July, the defence division of the Mahindra Group, Mahindra Defence Systems Ltd, and Europe’s Airbus Helicopters also signed an in-principle agreement to set up a joint venture to manufacture helicopters in India. Both these ventures can take India considerably ahead in this high-tech sector.
It seems the indigenous Tejas will also get into mass production to get completed the order from IAF through outsourcing in big way to Indian vendors.
Defence will contribute the most in Make in India drive. One such may of BAE Systems, USA. BAE Systems may establish an AIT facility in India that “will lay a foundation to expand future work content in India, potentially leading to M777s for India and for possible export.”
3. Domestic manufacturing of mobile phones: Maharashtra, Andhra Pradesh, Uttar Pradesh, and even West Bengal are pushing to have manufacturing clusters for manufacturing mobile phones. Foxconn has already got the allotment of the required land for the project on Pune-Mumbai Expressway in Maharashtra. It has already started assembling some brands in Sri City industrial cluster in Andhra Pradesh, and has big plans to create the ecosystem for mobile phone manufacturing. According to the MoU, Foxconn will set up one or several hi-tech industrial parks for mobile phones, computers, monitors, televisions, network devices, electronic components, automotive electronics, precision tooling, LED lights and smart-city development in different states.
A dedicated mobile handset and electronics manufacturing facility has started taking shape at Tirupati also. The facility will house brands such as Karbonn Micromax, Celkon and Lava. Lava has also started its manufacturing plant at Noida, and is going for a bigger one in an electronics manufacturing cluster on Yamuna Expressway. Videocon has started the manufacturing in Kolkata. With so many of these manufacturers, many vendors of parts will also set up their manufacturing facilities in India.
Let us hope that in next few years, Make in India gathers further speed.