Mfg industry needs support from govt, pvt sector: CII

Industry chamber CII today said there is a lot of potential in the manufacturing industry but it needs the support of both the government and private sector to tap that. The industry body said the country can utilise global events such as China's declining manufacturing competitiveness which is visible in its declining exports and depreciating currency to its advantage.

"The decreasing cost competitiveness of China is opening up a window of opportunity and India is definitely well positioned to capture this. Already our automotive sector competes with the best across the globe," Godrej & Boyce Chairman and MD Jamshyd N Godrej told reporters here after launching the CII-organised Manufacturing Summit.

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Over the past two decades, labour rate arbitrage was the main driver for offshoring of production to China and provided substantial costs savings of 20-40 percent, in spite of lower productivity. However, since 2009, production workers' wages have inflated at almost four times the rate of Indian wages and the relatively low productivity as compared to the US standards is clearly eroding China's competitiveness, he said.

Godrej further said the country needs to invest more on the R&D front to improve its manufacturing. "Manufacturing quality along with R&D and innovation depth will be key focus areas for India to become a top quality and high technology manufacturing destination. To realise our manufacturing vision we need to look beyond low-cost leadership and focus on building a cohesive environment of easy regulatory frame work, good quality infrastructure and establishment of common markets," he said.

India is lagging behind in R&D and innovation with less than 1 percent of GDP invested in R&D and only 190 R&D professionals per million population, against 1,100 in China and over 5,000 in Germany.