By minimising costs, increasing local value addition, collaborating to compete and innovate and handholding MSMEs, India could become a strong global manufacturing hub for a range of industries, pointed out Pawan Goenka, Chairman, SCALE Committee and former Managing Director of Mahindra & Mahindra Ltd.

“Many people think that India has already lost the plot in terms of manufacturing. And there are countries like China, Vietnam, even Cambodia and Malaysia that are way ahead of us and India will find it difficult to catch up. I don’t think so. I believe there are still tremendous opportunities for India. Of course, there are no low hanging fruits for everyone. We will have to work at it because we are starting somewhat late,” he said while virtually addressing the inaugural session of the CII SR Summit on Future of Manufacturing in South India.

All stakeholders such as the industry and the government have to come together to achieve scale in India’s manufacturing. Even small countries like Vietnam and Malaysia, with very small domestic markets, can create a scale in many sectors and India is not able to create it. “It is up to us to see how we create a scale for sectors like electric vehicles,” he added.

Goenka pointed out that infrastructure efficiency and the logistic cost is a big challenge as it is higher in India than the global average. The logistics industry has to work on improving efficiency instead of relying on the government. Of course, in some way, Goods and Services Tax (GST) has helped in reducing logistic costs. But we all have to work much more on the efficiency of logistics to bring that cost down to 8 per cent from the current 13 per cent, he added.

A collective effort is needed to boost labour productivity with government support through flexible labour policies. Strengthening the micro, small and medium enterprises (MSME) sector, which is the backbone of Indian manufacturing, is vital. Here tier-1 manufacturers or suppliers have to take on the responsibility of hand-holding them and making MSMEs strong to supply the domestic requirements in the place of imports.

Goenka felt the research and development (R&D) spending of the Indian industry was minuscule. It has been said many numbers of times that the Indian industry is not investing enough in R&D.

Average R&D is 0.5 per cent which is very, very low and the industry has to focus more on it.

“Unless we do a lot of innovation and technical innovation, our objectives in manufacturing would not be achieved,” he added.

Manmeet K. Nanda, Joint Secretary, DPIIT, Government of India, said the Central government was working on further measures to improve ease of doing business.

“While we have received several suggestions and feedback from various sectors, the government is thinking of putting all approvals and clearances relating to pollution areas into a single online application to make things easier and do so in a time-bound manner. The government is interacting with different departments to take this forward,” she added.

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