The best is yet to come

Despite the spasmodic upheaval in the Indian manufacturing and apprehension expressed by economists, the manufacturing sector is well-seated on its saddle holding ample promise. According to a recent survey carried out by FICCI, the manufacturing sector is projected to rise to 9.5% in 2008-09, after declining to 8.8% in the 2007-08 from a high of 12.3% attained in the 2006-07.

According to the survey, there has been an upsurge in the manufacturing sector in India. India's manufacturing hub is the fourth largest among emerging economies of the world. The basis for such a drastic change were increased investment by companies leading to substantial capacity addition, increasing mergers and acquisitions helping industry to reap economies of scale, focus on high-end and superior technology products, entry of foreign companies in various industry segments and higher export prospects for many sectors.

India's huge domestic market and availability of low-cost labour with advanced technical skills and expertise has helped in attracting the multinationals and foreign companies to set up their manufacturing base in the country. For example, ABB, Honeywell, and Siemens in electrical and electronic products; Cummins and Toyota Motor in auto components and engineering; and Degussa as well as Rohm and Hass in specialty chemicals have set up their manufacturing base in India. The 11th Five Year Plan expects manufacturing sector to grow at 10-11 per cent/year during the period 2007-12.

The various manufacturing sectors, which are likely to project optimistic potential of growth included chemicals (22%), power cables (20%), earth moving and construction equipment (20%), industrial valves (20%), printing machinery (20%), viscose fibre (20%), frost-free refrigerators (25%).

Adding credence to the survey was Finance Minister, P. Chidambaram's assertion that the Government was committed to make India a manufacturing hub for a host of industries such as textiles, leather, food processing, handicrafts and petroleum products. Chidambaram said that in the next 3-5 years, India would be the largest producer of small cars in the world.

India has achieved excellence in some of the leading manufacturing sectors; for example, Hero Cycle is the largest manufacturer of cycles in the world. Essel Propack is the first company to introduce laminated tubes in India and is the largest manufacturers of specialty packaging materials. Bharat Forge has emerged to become the world's second largest forgings manufacturer. Ranbaxy Laboratories is India's largest pharmaceutical company, which manufactures generic drugs in 11 countries.

The recent mergers and acquisitions by Indian companies have further fuelled the prospects of Indian manufacturing on a global scale. With KM Birla's Hindalco acquiring the world's largest producer of rolled aluminium products, Novelis, and LN Mittal taking over the world's largest steel-maker, Arcelor, and Tata acquiring Corus are now lore of the past. In fact, these deals herald the emergence of India as international hub for metals, petro-products and auto components.

The exemplary performance of Small and Medium Enterprises (SMEs) has been a milestone in the accelerated growth of the manufacturing sector in India. SMEs’ share of Gross Domestic Product (GDP) is likely to go up by 25% by 2012 from the current 17% as in the last couple of years. It is to be noted that SMEs have a dominating presence in the national export - its contribution is estimated to be around 38%, which is growing to over 44% in the upcoming 5 years.

At present, SMEs sector accounts for 95 per cent of industrial units and it is contributing about 40 per cent on the value addition in the manufacturing sector. Currently, there are more than 32 lakh Small and Medium Enterprises (SMEs), which are spread over the country producing about 7500 items and generating employment to more than 400 lakh persons.

India is already on the path of becoming the 5th largest consumer market in the world by 2025. It is projected that the total Indian consumer spending will be approximately US$ 1.77 trillion by 2025.

The Major Indian Manufacturing Sector

• Capital Goods
• Engineering Goods
• Textiles & Apparels
• Chemicals, Petrochemicals & Fertilisers
• Consumer Non-durables
• Packaging
• Mining
• Electronics, IT Hardware & Peripherals
• Gems & Jewellery
• Leather & Leather Products
• Steel & non-ferrous Metals
• Water Equipment

Giving a definite shape to India's manufacturing sector has been its strategically located industrial clusters, which are located in various parts of the country depending on the availability of raw material and manpower. The chief among them include:

Agro Products Processing

The major cities of Agro products processing products in India include Karnal- Kurushetra for Rice, Gondia for Rice milling, Sindhudury and Palasa for cashew nuts processing, Amravati for Cotton seed oil, Chittoor for Fruit processing and Salem for Starch & Sage

Agricultural Implements

The major cities of Agricultural implements products in India include Karnal and Gudivada for agricultural implements.

Carpet

The major manufacturing hubs of carpet products in India include Bhadohi (Mirzapur) and Chunnar (Mirzapur) for carpets.

Leather & Leather Products

The major cities of Leather & Leather Products in India include Agra for Leather footwear, Tangra, Topsia, Tiljola, (Eastern Cal.) for Finished & Semi-finished leather, Mau Aima (Allahabad) for leather and Warangal for Leather tanning.

Sports Goods

The major city for sports goods products in India is Meerut.

Safety Matches & Fire Products

The major hub for manufacturing Safety Matches & Fire Products in India includes Sivakasi for Safety matches & Fire works and Kovilpatti for safety matches.

Textiles

The major centers for Textiles products in India include Panipat for Bed covers, towels, shawls, durries, blankets, etc., Mau, Bhadohi, Pochampalli for silk sarees, Gorakhpur for Handloom, Handloom suitings & shirting's, Ambedkar Nagar (Thanda) for power loom, Coimbatore for textiles, Tiruppur for textiles and salem for garments.

Printing

The major manufacturing hub for printing products in India includes Sivakasi for Offset printing.

Plastic & Plastic materials

The major places for Plastic & Plastic materials products in India include Bhiwani (Haryana) for Plastic granules & other plastic items, Khatilabad (Basti) for Plastic items and Mumbai for Plastic toys.

Glass & Ceramics

The major cities for Glass & Ceramics products in India include Firozabad for Glass Industry, Khurja for Ceramic Industry, Thangadh for Ceramic Products, Bhadohi and Chunnar (Mirzapur) for Potteries.

Refractories

The major cities for Refractories products in India include Durgapur (Asansol) for Refractory Brick, Dhanbad, Ranchi, Hazaribagh, East Godavari for Refractories.

Foundry Castings, Fabricators

The major cities for Foundry Castings and Fabricator products in India include Rajkot for Ferrous Castings, Jaipur and Hyderabad for Foundry, Batala for Foundry & Castings, Agra Foundry & Castings and Nagpur for Engg. Fabrication.

Steel Rerolling

The major cities for Steel Rerolling products in India include Bhavanagar for Rerolling and Howrah Ind. Belt for Steel Rerolling.

Machine Tools

The major cities for Machine Tools products in India include Ludhiana, Batla and Coimbatore.

Machined Brass Parts

The major city for Machined Brass Parts in India is Jamnagar.

Auto Components

The major cities for Auto Components products in India include Ludhiana for Bicycles & Parts, Okhla for Automotive Parts, Rohtak and Hyderabad for Turned Auto Components.

Diesel Engines

The major cities for Diesel Engines products in India include Rajkot for Diesel Engines & parts and Kolhapur for Diesel Oil Engines.

Electrical Items

The major cities for Electrical Items in India include Varanasi for fans, Hyderabad for Ceiling Fans, Varanasi for Pumps, Coimbatore for Electric Motor & Pumps, Mau Aima (Allahabad) for Voltage Stabilisers and Transformers.

Transformers

The major cities for Transformer products in India include Jaipur for distribution transformers, Jaipur for AAC/ ACSR Conductors and Calcutta for Transformer and Invertors.

Dry Cell & Batteries

The major cities for Dry Cell & Battery products in India include Baranagar for Dry Cells, Midnapur and Howrah for Batteries.

Electronic Products

The major city for Electronic products in India is Hyderabad.

Scientific & Survey Instruments

The major centers of manufacturing Scientific & Survey Instrument products in India include Ambala for Scientific Instruments and Roorkee for Survey Instruments.

Drugs & Pharmaceuticals

The major cities for Drugs & Pharmaceutical products in India include Delhi and Ahmedabad for Pharmaceuticals, Mumbai Thane, Belapur for Basic drugs and Hyderabad for drugs.

Service Activities

The major city for Service Activities in India is Vijayawada for Auto Repair Works.

Others

The major cities for manufacturing other products in India include Aligarh for Lock Industry, Nagpur for Hand Tools, Domjur T & TT Makardah jagat Bavvavpur (Blocks of Howrah Dist.) for Artificial/ Imitation Jewellery, Morbi for Wall Clock, Savarkandla for Beans Scale & Combi Balance, Ahmedabad for Dyes & Dye intermediates, Jagadhari (Yamunagar) for Domestic utensils (Steel & Alumn.), Rajapalayam for Gauge cloth, Paramakudi (Ramnad dist) for EB Hardware items Digiana, Ashok Nagar, Satwari Jammu Cantt.(around Jammu) & Udhampur, Kathua and Rajouri for Gum making, Varanasi for Black Beads, Rajhmundry for Graphite Crucibles, Machilipatnam for Gold Covering Industry Hyderabad for Synthetic Detergents, Kuppam for Granite Processing and Kondapalli for Toy Making.

(Courtesy: The data incorporated in the report has been taken from the survey carried out by FICCI, Ministry of Finance and other credible sources. Thomex.com however, bears no responsibility for any misrepresentation, if any.)


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