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Ready to become global manufacturing hub

Ready to become global manufacturing hub
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First Published: Sun, Feb 18 2007. 09 33 AM IST
Updated: Sun, Feb 18 2007. 09 33 AM IST
By PTI
Houston: With the emergence of a vast domestic market and relatively low-cost workers with advanced technical skills, India is on the verge of becoming a manufacturing powerhouse within the next five to 10 years.
More and more multinationals are setting up manufacturing operations in India. Ford, Hyundai and Suzuki all export cars from India in significant numbers. LG, Motorola and Nokia all either make handsets in India or have plans to start, with a sizeable share of production being exported, according to a new report.
ABB, Schneider, Honeywell and Siemens have set up plants to manufacture electrical and electronic products for domestic and export markets.
The new report, entitled “What’s Next for India: Beyond the Back Office,” by The Boston Consulting Group and Knowledge@Wharton, says India has been behind in manufacturing sector mainly due to poor infrastructure, bureaucratic red tape and restrictive labour laws.
“Over the past five or six years, many firms have restructured their manufacturing operations and implemented world-class practices,” says Arindam Bhattacharya, a partner in BCG’s New Delhi office.
“Slowly but surely, they have started building a globally competitive manufacturing base in industries like pharmaceuticals, auto components, cars and motorcycles.”
Also optimistic is Wharton professor of management, Saikat Chaudhuri. “Every major company has India on its radar screen,” he says in the report. “It’s just a matter of timing.” As the success of firms such as auto parts maker Bharat Forge shows, India’s competitiveness lies in relatively high-end manufacturing.
“Indian universities graduate 400,000 engineers a year, second only to China,” notes Harold L Sirkin, a senior partner in BCG’s Chicago office and leader of the firm’s global operations practice.
“It’s only a matter of time until India converts its engineering prowess into manufacturing capabilities.”
Some of the other highlights of the report said-- India is in the midst of the most ambitious infrastructure upgrade in its history and better roads, ports, power and airports could easily nudge the nation’s annual GDP growth rate up to a sustainable 8 per cent.
Also optimistic is Wharton professor of management Saikat Chaudhuri. “Every major company has India on its radar screen,” he says in the report. “It’s just a matter of timing.” As the success of firms such as auto parts maker Bharat Forge shows, India’s competitiveness lies in relatively high-end manufacturing.
“Indian universities graduate 400,000 engineers a year, second only to China,” notes Harold L Sirkin, a senior partner in BCG’s Chicago office and leader of the firm’s global operations practice.
“It’s only a matter of time until India converts its engineering prowess into manufacturing capabilities.”
Some of the other highlights of the report said-- India is in the midst of the most ambitious infrastructure upgrade in its history and better roads, ports, power and airports could easily nudge the nation’s annual GDP growth rate up to a sustainable 8 per cent.
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First Published: Sun, Feb 18 2007. 09 33 AM IST
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