BackHow India approaches manufacturing: the story so far
Since Make in India's launch, Mint has covered various aspects of India's manufacturing sector extensively
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Why foreign auto makers will make in India
The government wants to make the auto sector the prime mover of its Make In India campaign, which coaxes companies to choose India as a manufacturing base over other countries. Despite a year in which their sales shrunk, and despite accumulating losses that run into thousands of crores, many of the world’s largest foreign auto companies will, in all likelihood, keep pumping more resources into India, simply for its numerical promise on the world auto map.
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The Make in India opportunity in five charts
—Niranjan Rajadhyaksha
India has failed to ride the manufacturing wave that helped so many countries in Asia emerge out of mass poverty. Prime Minister Narendra Modi’s exhortation to companies to “make in India" is one indication that he wants to replicate the Asian manufacturing success stories in India.
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The Make in India bubble
—Prashanth Perumal
An economic plan to dedicate each man’s labour in a day equally between agriculture, services, and manufacturing to achieve “balanced" growth would be ridiculed by all but the most naive. Thankfully, that specialization and trade benefit the world through greater economic productivity is accepted without debate by even the most illiterate. But when some say the size of the manufacturing sector in India is too small to achieve “balanced" growth, the urgent need to revive the sector is bandied about.
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Posco completes a decade waiting for India steel plant
—Ruchira Singh
It is an imperfect 10 for Posco. After a decade’s wait, the South Korean firm’s steel plant project in India looks unachievable, issues surrounding it seem irresolvable and people associated with it too weary to discuss it.
Posco’s $12 billion, 12 million tonnes (mt) integrated steel plant project was formalized on 22 June 2005 with the signing of a memorandum of understanding (MoU) with Odisha, but what was India’s largest foreign direct investment—a showpiece to attract more foreigners—is now an example of how things go bad in India’s bureaucratic set-up.
In the past 10 years, social, political, environmental and regulatory hurdles have bogged down Posco and forced it to downsize the plant to 8 mt using about half of the 4,004 acres promised earlier; yet, land for the plant is still elusive.
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The ghost of Sriperumbudur
—Ashish K. Mishra & S. Bridget Leena
There wasn’t much time. She had to get ready. 20 minutes later, she was. Looking into a mirror, hung on the wall, she generously dabbed talcum powder, carefully put on a small bindi on her forehead and fixed her long, dark hair in a bun. Then, slowly she took off her gleaming, gold engagement ring and put it away safely in a wooden drawer. She picked up her identity card and her handbag, said goodbye to her mother and walked out the door. Kanchipuram, a town famous for silk sarees and temples, was still waking up.
It was 10 minutes to 7 am and Kamakshi paced towards the white Nokia bus waiting for her. She signed her name in the register and hopped on. The bus was full of women, all 20-something. Kamakshi acknowledged her colleagues with a dry smile, a nod of the head. They smiled back. Nobody said anything. Some were plugged into their mobile phones, listening to music or the radio. At about 10 minutes past 8, the bus entered Nokia plant and dropped off the women close to the locker room. Kamakshi walked in. Once inside, she tucked her Sony Ericsson phone in her handbag, then she neatly folded her dupatta, put everything in a tray and shut the locker.
It was 8.20 am—time for breakfast. She swiped her card for ₹ 13 for a South Indian meal—some pongal, one vada and coffee. She sat with her colleagues, her friends and quietly finished her breakfast. At about 8.40 am, five girls, including Kamakshi, walked out of the canteen towards the circuit board assembly line.
Once there, all the girls put on an anti-electrostatic white apron, with black stripes, and tied it around their neck and waist. Then they put on white anti-electrostatic shoe covers.
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Govt aims to make automobiles lynchpin of manufacturing drive
—Amrit Raj
The government wants to turn the automotive sector into the “mother of manufacturing activities" by making it the engine of Prime Minister Narendra Modi’s Make in India initiative, according to a government document that was to be made public on Wednesday. The National Democratic Alliance (NDA) government expects the passenger vehicles (PV) market to triple to 9.4 million units by 2026 from 3.2 million now if the economy grows at an average rate of 5.8% a year, says the document titled Auto Mission Plan (AMP) 2016-26.
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Bosch’s long tryst with India
—Ashish K. Mishra
To understand the scale and significance of Bosch, strip a few vehicles—maybe a few cars, diesel and petrol, trucks and perhaps a tractor. As you strip down each of them, part by part, here’s what is likely to have come straight out of the 10 factories of the German automotive component giant: the fuel injection system, for both diesel and gasoline engines, which determines how much fuel to let into the engine every time the accelerator is pressed; electronic control units (ECU), or simply the brain of the vehicle, which pick signals from the various sensors and tell the vehicle what to do, like how much fuel to inject; then there is the whole braking system—disc, pads, master cylinder, and the anti-lock brake system; the start-stop system which, while keeping the engine cool, also helps in economy, saving fuel by almost 8-12%; electric motors, all sorts of them, for instance, those used in power windows; spark plugs; windshield wipers and motors; starters; horns; fans; timing belts; batteries; bulbs; fuel, oil and air filters; and a navigation system to get you from place A to B without losing your way. All of this—and this is still not the whole laundry list, but you get the drift.
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Speed it up the Hyundai way
—Amrit Raj
One hundred and twenty. That’s the number of variants of the i10 and Grand i10 models that Hyundai Motor India Ltd makes at its Sriperumbudur factory near Chennai.
100. That’s the number of countries it exports them to.
And 260,000.
That’s the number of cars it exported last year. No other factory of the South Korean multinational corporation (MNC) manufactures as many variants; the variations may be small, but they involve a degree of complexity that go against the standardization that has been the key to assembly lines ever since Henry Ford realized that this was the best and cheapest way to make cars.
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Make in India blitz driven by made in China tech
—Asit Ranjan Mishra & Moulishree Srivastava
At the launch of the Make in India campaign in September 2014, there was an irony that was hard to miss for those present—the USB flash drives containing the brochures for the campaign were made in China.
While it may have been an oversight on the part of the department of industrial policy and promotion, which was in charge of the rather well-organized event, the gaffe highlighted the limitations of India’s electronic manufacturing sector. Even though India has announced several programmes to promote domestic electronic manufacturing, these schemes have failed to work in the absence of a necessary ecosystem.
India imports 65% of the current demand for electronic products, most of it from China. If the situation is left unchanged, the country’s electronics import bill may well surpass its oil import expenses by 2020.
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JCB perfects the art of manufacturing in India
—Amrit Raj
It is the ubiquity of these machines in the construction industry that has made it almost a generic name for earth-moving equipment, in the same way that Xerox is associated with photocopying and Unilever’s Surf is synonymous with detergents. Today, three out of every four construction equipment sold in India is a JCB, illustrating the absolute dominance of the British company in India. JCB is one of the few Western manufacturers that have been able to establish such supremacy over the local market and is a prime example of an overseas company that has prospered after setting up factories in Asia’s third-largest economy.
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Innovation pays off for Cummins
—Ashish K. Mishra & Shally Seth Mohile
Padarwadi is a village of rice growers, located 110 km from Pune in Maharashtra. A key step in processing raw rice is dehusking—for many decades an arduous task for the farmers, who, without electricity to power a dehusking machine, had to trek to another village that had power supply to perform the task. That’s until Cummins Inc. stepped in, in 2011. Working together with the Indian Institute of Technology, Bombay, and non-profit Maharashtra Arogya Mandal, the company’s unit Cummins Power Generation developed a generator— one that runs on oil extracted from local pongamia seeds for fuel.
The generator was used to power the village’s own electric dehusker—a small innovation that has made life a lot easier for the rice farmers of Padarwadi.
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Foxconn’s second coming could spur a Make in India wave
—Mihir Dalal & Shrutika Verma
Are-entry into India by the Taiwanese company, which exited the country earlier this year, may spur other electronics makers to set up shop here and start the process of building a comprehensive, ground-up electronics supply chain that is essential for Prime Minister Narendra Modi’s Make in India push, experts said.
An eager, business-friendly government and the Indian consumption story, which had lost its sheen over the past three years, may finally attract wary manufacturers. Rising labour costs in China, which dominates manufacturing, and an eagerness to reduce dependence on that country are pushing manufacturers to new destinations. One such place could be India, which has a massive labour force, a large domestic consumer market and a government’s promise to promote manufacturing.
“Foxconn’s entry will certainly be a shot in the arm for the local manufacture of solar panels but not necessarily for every type of electronics manufacturing," said Ravi Venkatesan, former chairman of Microsoft India and Cummins India. “The biggest challenge for electronics manufacturers is the lack of an ecosystem in India. This ecosystem takes time to develop. But the good thing is that India is a huge market and with the appropriate policy environment we should be able to pull this off in 5-7 years."
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