India Inc ready for big stage but bottlenecks are worrying

Even as India's manufacturing sector waits to reach its full potential as a global outsourcing hub, challenges that keeps it away from its target continue to haunt industry.

Representatives from Indian and global manufacturers firms, participating at the three-day India Economic Summit said that hurdles continued to exist at various levels, some of which can be overcome by the active intervention of the government.

Chief among the hurdles were those relating to infrastructure, particularly in terms of ports and roads connecting to the ports, that delayed exports.

Discussing the challenges faced by the Indian manufacturing sector, Cobra Beer Ltd's CEO, Karan Faridoon Billimoria said the labour laws in India needed to be more flexible.

"In Europe, for instance, the UK attracts more foreign investments then France does, because of its flexible labour laws," he said.

Some of the leading lights from the manufacturing sector in India and abroad discussed the issues involved in the manufacturing sector in the session, 'Made in India: Will Manufacturing Drive Export Growth?'

Though the control Raj has been eliminated to a great extent at the central level, the problem continues to plague the industry at the state level. There was general consensus that the industry was out of the Union government's control 'up to 70 per cent.'

Participants also said power continued to be a major issue for the manufacturing sector. Though power distribution has been privatised, it has not taken off the ground in a big way.

There are still manufacturing units that depend fully on captive power. "Good quality power at a cheap price must be made available," Billimoria said.

Participating in the discussion on the same subject, Baba N Kalyani, CMD, Bharat Forge, said that if Indian manufacturers focussed too much on 'muscle power' instead of their strengths in R&D and innovation, they would lose out to competitors from China. "The focus must shift from market access to being part of the global supply chain," he said.

The need to promote the 'brand India' was also reiterated at the discussion. "There are many success stories in India at global quality level," said Gautam Thapar, vice-chairman and managing director, Ballarpur Industries.

He added that success cases, where the infrastructure impediments had been overcome must be communicated to the world at large. "If that is done, Indian companies have a greater chance of success," Thapar said.

Despite manufacturing products that match global quality standards, packaging continues to be a weak area in the Indian manufacturing sector.

Despite the challenges, the overall outlook for Indian manufacturing sector was 'thumbs up,' said Billimoria.