Mumbai:
India, with its world-class production facilities and
a rapidly changing business environment, could become
a manufacturing powerhouse within five to 10 years, according
to a study conducted by The Boston Consulting Group and
the online journal of Wharton, Knowledge@Wharton.
While
the advent of the information technology revolution and
business process outsourcing turned the service sector
in India red hot, poor infrastructure, bureaucratic red
tape and restrictive labour laws have for long kept the
country's manufacturing sector at the back, say the study
by the consultants group and the noted US business school.
The
vast emerging markets, relative low labour costs and the
availability of skills at cheaper rates have combined
to make India a more attractive manufacturing destination
as well, says the report, titled "What's Next for
India: Beyond the Back Office.
Things
are changing rapidly as more and more multinationals set
up manufacturing operations in India, the report notes.
Ford,
Hyundai and Suzuki all have made India their export base.
They also source a major part of auto components within
the country. While major electrical and electronic manufacturers
like ABB, Schneider, Honeywell and Siemens have set up
production facilities for domestic and export markets,
mobile handset makers like LG, Motorola and Nokia are
either making handsets in India or have plans to start
production base in the country.
Meanwhile,
many Indian firms have restructured their manufacturing
operations and implemented world-class practices as the
markets opened and competition increased. Indian companies,
in fact, have built globally competitive manufacturing
facilities in industries like pharmaceuticals, auto components,
cars and motorcycles.
India's
success is due mainly to its competitiveness in relatively
high-end manufacturing and the huge engineering and scientific
talent its universities churn out every year. It is only
a matter of time that India converts its engineering prowess
into manufacturing capabilities.
The
potential is huge considering that India is in the midst
of the most ambitious infrastructure upgrade in its history
better roads, ports, power and airports, which
alone could sustain an eight per cent annual GDP growth
in the country.
On
top of it, India's failed power sector reforms and the
successful telecom services could bring competitive investment
opportunities in India.
Beyond
the back office and the emerging manufacturing revolution
there are superstars that lift India to a new value chain
where knowledge, specialised expertise, judgment and discretion
are the tools.
Founded
in 1963, The Boston Consulting Group with 61 offices in
36 countries helps companies, industries and markets achieve
competitive advantage. Knowledge@Wharton is an online
knowledge source set up by The Wharton School of the University
of Pennsylvania.
|