Domestic market key to manufacturing industry''s strength

Kochi: The domestic market holds the key if India wants to regain its strength in the manufacturing industry to meet the global competition, according to Indian Oil Corporation chairman M S Ramachandran.

He was speaking at the two-day 22^nd Annual Management Convention of the Kerala Management Association (KMA).

Stimulating the domestic sector will automatically boost the exports and the competitive edge, and will help India become a global manufacturing destination, he said.

Speaking on the main theme, ‘Beyond Globalisation,’ he said Indian industries have to follow a good supply-chain management and develop new products and innovations. “The industries should dominate chosen product markets — either domestic or global — and create competitive advantage through cost-leadership, and provide quality products and services without loss of time as the world is fast changing.”

He felt low cost capital, financial innovations, transparency, sound corporate governance, core institutional skills and world-class systems and processes are essential for India to achieve a winning position in the world market.

Ramachandran pointed out that while the services sector has shown a rapid growth, the share of manufacturing in the gross domestic product (GDP) has gone down from 17.20 per cent in 1989-90 to 15.17 per cent in 2001-02. “Consequently, the country faced a flood of cheaper imports from China.”

Delivering the keynote address at the function, Tarun Das, director general of Confederation of Indian Industry (CII), was also upbeat about the recovery in the manufacturing sector this year. “India is becoming globally competitive in this field and could become the second factory in the world after China.”

He said there has been good progress in the infrastructure development while India is poised to become the global hub for the service sector. “But India is facing difficulties in the agriculture sector but cannot improve with measures like adoption of a common food law.” Praising the skills of the managers in public sector units (PSUs), Das said in certain areas PSUs should be retained.

KMA president O T S Nambiar delivered the presidential address. Sunil K Zachariah, chairman of the convention committee, welcomed the gathering, and D Rejith, honorary secretary, KMA, proposed the vote of thanks.