Friday, June 15, 2012: 01:44:36 PM

Machinist Poll Feature

Local manufacturing to cut down price for global makers

With price rising in India rapidly, global manufacturers are increasingly looking at locally manufacturing their products to sell to consumers at affordable rates

India’s rising inflation rate has sufficiently hiked the manufacturing cost in the nation. In such a situation, it is getting extremely difficult for global manufacturers to carry on with their business. Therefore, local manufacturing among global manufacturers have picked up pace in recent times.

When Machinist30 conducted a poll asking respondents whether local manufacturing will throw open doors for global manufactures in the cost wary nation, a whopping majority of 100% of the respondents replied in the affirmative.
Many global manufacturers, several among them belonging to the automobile fraternity have either set up their wholly owned manufacturing facility or in collaboration with Indian partners in the country. According to Vibhu Kapil, proprietor of Labco, a New Delhi based scientific equipment manufacturer, “With cost of raw material going up at a fast rate in the country, many global manufacturers have found recourse through locally manufacturing.”
In an inflation strung economy, it is necessary for manufacturers to offer consumers. The domestic market is a place where being best is not good enough. To target the low end of India’s engineering markets, which accounts for over 70% of sales, manufacturers need to offer the best value, and to do that they need to go local.
In this context, E T Jaichan, proprietor of Jaico Tools, a Bengaluru based cutting tool manufacturing firm, “Taxes on imported parts take the cost of the entire unit to staggering heights. No wonder that global makers are looking at locally manufacturing their products here.”
Concern for local manufacturers
There is serious concern on the part of domestic manufacturers too. If customers can get gear manufactured by the global firms at lower or equal price as compared to the domestic manufacturers, the demand for international ones will rise significantly.
Car makers have been localising their products for years, sourcing materials and making cheap, India-tailored vehicles and now, this trend may catch on like wildfire.
Priyanka Roy Chowdhury

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