What India Makes- Pretty Laudable: This is my informative reply to a question that many ask. Where does India stand in manufacturing? India’s ranking among the world’s 10 largest manufacturing countries has improved by three places to sixth position in 2015#.
India has potential of becoming the hub for hi-tech manufacturing with global giants such as GE, Siemens, HTC, Toshiba, and Boeing having either already manufacturing plants and R&D centres in India or some of them in process of setting it up. GE India is on track to achieve the sourcing target of $4 billion from India. GE has set up a dedicated production line at its Padappai facility near Chennaities for high-voltage transmission equipment.
India as an attractive destination for local manufacturing is its huge market and its a billion plus aspirational consumers who are improving their purchasing power by day.
In September 2016, Foreign Direct Investment (FDI) in electronic manufacturing has reached an all-time high of Rs 123,000 crore (US$ 18.36 billion) in 2016, from Rs 11,000 crore (US$ 1.65 billion) in 2014.
India has been a significant manufacturing power already in many sectors:
Bharat Heavy Electricals Ltd and Larsen and Toubro Ltd are the domestic heavyweights in power equipment manufacturing sector.
Alstom T&D, Siemens Ltd and ABB India Ltd cater to power transmission and distribution. ABB has multiple global feeder factories in Nasik and Vadodara in India, which meets both domestic and global demand. ABB India’s exports have been cloaking 21 per cent CAGR over the last four years.
Thermax Ltd, Crompton Greaves Ltd and Cummins India Ltd also have its presence in industrial sector.
JCB is the largest manufacturer of earth-moving or construction equipment in the country, followed by Tata Hitachi Construction Machinery, Komatsu India Pvt. Ltd and Caterpillar India. The market picked up to 36,798 in 2015. With the hope of the market bouncing back, JCB India commissioned a third manufacturing facility in Jaipur last year.
Indian companies have been the major manufacturers of tractors with major domestic manufacturers such as Mahindra, TAFE, Eicher and Escorts that are already expanding into the manufacture of the whole lot of farm machinery such as power tillers and combine harvester. Local players like Tirth Agro Technology that makes Shaktiman brand of implements have cornered 85-90% of the market in the initial shift to mechanisation. John Deere, German company Lemken and Italian Maschio Gaspardo have set up manufacturing facilities in India for farm machinery other than tractors.
India has become one of the most attractive destinations for investments in the manufacturing sector. I keep a track of media about the new manufacturing units getting setup in India. It is pretty impressive. Some of the major investments and developments in manufacturing sector in the recent past are:
@According to Foxconn’s head of India operations Josh Foulger, the world’s largest contract manufacturer has already started manufacturing in India in SriCity and will expand its India operations next year, backing its $600 million investments already made in the country.
@Huawei, the China-based smartphone manufacturer with solutions provider Flextronics Technologies (India) Private Limited will manufacture its smartphones at its facility in Chennai and is expected to generate additional 1,500 jobs.
:LeEco, a Chinese technology company, has entered into a partnership with Compal Technologies and invested US$ 7 million to set up manufacturing facility at Greater Noida in order to start manufacturing Le2 smartphones in India.
:Zopo Mobile, a China-based smartphone manufacturer, plans to invest Rs 100 crore (US$ 15 million) to set up a manufacturing plant in Noida by the end of 2016, which will have a monthly production capacity of 100,000 units.
:The Jiangxi-based component maker, Holitech Technology, a maker of LCD and touchscreen panels used in mobile phones, plans to invest $1billion in India by next year.http://economictimes.indiatimes.com/industry/cons-products/electronics/holitech-plans-to-invest-1-billion-in-india-by-2017/articleshow/55020489.cms
:Chinese smartphone companies Oppo and VivoBSE 2.01 % plan to invest a combined Rs 4,000 crore in Uttar Pradesh to build separate manufacturing complexes as part of their expansion plans in India. http://economictimes.indiatimes.com/tech/hardware/oppo-vivo-make-big-call-to-invest-rs-2000-crore-each-in-up/articleshow/55058577.cms
@Home-grown Intex Technologies is planning a large integrated manufacturing plant spread over 1 million sq ft at a 20-acre property at Greater Noida at a cost of R1,500 crore. The production of first phase will start this year itself consolidating all its manufacturing activities which is currently spread over its four facilities in Jammu and Kashmir, Baddi and Noida.
@Manufacturing capacity of mobile phones and refrigerators from the Samsung plant at Noida will be doubled – mobile phones in particular will rise to 12 million a month from 6 million a month – in the three-year time frame. The Noida plant employs around 4,000 people. Samsung India will invest Rs 1,970 crore for doubling capacity at its Noida, Uttar Pradesh manufacturing facility by 2019-end, from where it plans to export mobile phones and white goods.
@Panasonic Corporation plans to set up a new manufacturing plant for refrigerators in India with an investment of Rs 250 crore (US$ 37 million), and also invest around Rs 20 crore (US$ 3 million) on an assembly unit for lithium ion batteries at its existing facility in Jhajjar in the next 8-10 months.
Defence is another sector where there is a lot of activity.
@Tata Power has partnered with US-based Javelin Joint Venture, which is a partnership between Raytheon Company and Lockheed Martin, for its Strategic Engineering Division (SED), in order to create a strategy to co-develop and produce the Javelin missile system and integrate platform mounts to meet Indian requirements.
@Boeing Company, an American plane maker, and Tata Advanced Systems Ltd (TASL), a fully owned subsidiary of Tata Sons, have entered into a joint venture to set up a new facility in Hyderabad to manufacture Boeing AH-64 Apache helicopter fuselages.
:Airbus has procured more than US$ 500 million worth of supplies from India in 2015, registering a growth of 15 per cent annually and has targeted a cumulative procurement of more than US$ 2 billion over a period of five years up to 2020.
@Bengaluru-based defence electronics maker, Alpha Design Technologies that manufactures a variety of electronic devices for armed force in two its plants in Begaluru, has recently bagged a major export order from Israel’s Elbit Systems valued at $6 million for the supply of 600 units of VHF communication devices for armoured vehicles. It has a plan to set up two new greenfield manufacturing plants in Bengaluru to cater to the future orders from armed forces and export markets. It currently exports to Israel, the US and Germany
@The Brazilian Perto S. A., a Digicon Group company, a high technology and IT company and the world’s leading manufacturer of Automatic Teller Machines (ATMs) and Cash Dispenser Machines (CDMs), inaugurated its first plant in India, in the Mahindra World City in Jaipur. The manufacturing facility in Rajasthan required an initial investment worth $3.1 crore, that may exceed $6.5 crore.
@Italy-based Bonfiglioli, which makes gearboxes, gear motors and inverters for the industrial automation and renewable energy sectors, is planning to expand capacity in India with an investment of about Rs 85 crore. The company has manufacturing facilities near Chennai — one in Thirumudivakkam and another one in Mannur, near Sriperumbudur.
@Canadian Bombardier Transportation India has manufacturing centres for metro coaches in Savli and Maneja, near Vadodara, Gujarat and has localised closed to 70 percent of the items.
@The China Railway Rolling Stock Corporation (CRRC), a Chinese government company, will set up its manufacturing unit in the Multi-modal International Cargo Hub and Airport at Nagpur (MIHAN) to build and supply coaches for Nagpur Metro. CRRC will make investment to the tune of Rs 1,500 crore to set up the manufacturing unit in MIHAN, which will generate employment opportunities for 5,000 people.
@Leading screen technology company Harkness Screens has a factory in Bengaluru.The facility in Bengaluru has capacity to manufacture 1,500 screens a year.The original investment decision was based on purely supplying the Indian cinema market. However, it now supplies screens around the world from the India’s Bengaluru factory to Japan, South Korea, Australia, and Thailand, among others.
@Cisco has recently announced that it will manufacture “a diverse product portfolio in India to support the government’s Make in India initiative.” The facility is most likely to come up in Pune.
@French major Schneider Electric is one of the very large industrial players in India with 28 factories, which are exporting more than 50% of their production, with 20,000 direct employment and 1500 in R&D and will invest additional Rs 750 crore in next year.
@Canada’s Magna International Incorporated has started production at two facilities in Gujarat’s Sanand, which will supply auto parts to Ford Motor Co in India and will employ around 600 people at both units.
@Marquardt, the German company that makes premium automotive switches will be setting up a greenfield plant at Chakan, Pune, India and will expand the local R&D centre.
@Havells India Limited, one of the top Indian consumer electrical equipment producer, plans to set up a new manufacturing unit near Bengaluru by making an investment of Rs 1,059 crore (US$ 156.99 million), which would be its twelfth plant in India and its first outside north India.
@Endurance Technologies is the largest aluminium die casting manufacturer in India and one of the leading automotive component manufacturers in aluminium die casting (including alloy wheels), suspension, transmission and brake systems. It operates 18 plants in India and 7 plants in Europe.
@Belgium-based wheelchair maker, Vermeiren, is launching its manufacturing facility in the integrated business city called Sri City, located near Chennai with its first phase of facility completed with an investment of around Rs 40 crore to manufacture 30,000 wheel chairs— and will offer its products to both India and overseas from the country.
@ GE healthcare have around 50 products globally that it has engineered and designed and developed in India. Those are selling well in India, (and) selling quite well globally as well.
@Tristone Flowtech Group, the Germany-based flow technology systems specialist, has set up a new facility in Pune, which will manufacture surge tank as
well as engine cooling and aircharge hose for the Indian market. The company plans to start the production at the plant in the fourth quarter of 2017.
Automobile manufacturing that really arrived with Suzuki has today the manufacturing plants of almost all globally known players in passenger cars, commercial vehicles, two-wheelers beside the domestic ones such as Tata Motors, Mahindra, Ashok Leyland, Hero MotoCorp and Bajaj Auto.
@Honda Motorcycle & Scooter India plans to invest around Rs 600 crore (US$ 88.94 million) to add a new line at its Narsapura facility at Karnataka, and launch at least 10-15 products during FY 2016-17 in the country.
@Force Motors, a utility and commercial vehicles manufacturer, inaugurated its Rs 100 crore (US$ 14.82 million) manufacturing facility in Pune, which will supply engines and axles to the Germany-based automobile manufacturer Mercedes-Benz.
@Isuzu Motors, the Japan-based utility vehicle manufacturer, has inaugurated its greenfield manufacturing unit in Sri City, Andhra Pradesh, which was set up for Rs 3,000 crore (US$ 444.72 million), with an annual production capacity of 50,000 units and is estimated to generate around 2,000-3,000 jobs.
Japanese are setting up manufacturing units in big way.
Toto, a manufacturer of sanitary ware, teamed up with trading house Mitsui to begin full-scale production at a state-of-the-art factory in Gujarat, which opened in August 2014.
Nidec, a maker of electric motors, announced last June that it would build its first plant in India, for ¥10bn (US$93m), in the Neemrana Industrial Area in Rajasthan—where Daikin has a factory. Nidec has plan to build around five factories in India.
Yokohama Rubber completed a new plant in the country in February last year.
India has all potential and possibility to become a manufacturing hub. But it is to move faster, and must improve much more than what it achieved in one year on the global index of ‘ease of doing business’ in India.