India emerges alternative to China in design skills

India achieves new competitive edge in manufacturing

India has recently become an alternative to China and other low cost regions for its superior skills in design capability. This is in addition to its greater cost effectiveness than China for small to medium volumes, said Sanjay Dawar, Partner, Accenture.

Speaking at the Excon-05 seminar on 'Showcase India: The outsourcing destination', Dawar said: "Presently the world looks at India for several reasons which include quality performance and good experience of multinational companies in India with local suppliers."

India offers other better known advantages like availability of qualified personnel, commitment to contractual agreements, adoption of robust accounting practices, and sound political structure, he added.

The consensus at the seminar was that Indian companies stood to gain from this trend of global companies leveraging India across all major sectors of manufacturing by building a diversified vendor base. This was translating into a strong resource capability.

Though India's share of manufacturing exports were presently rather small, the possibilities of this increasing was high since exports were growing at a rapid pace. Present market trends also showed that the export growth potential remained high since export markets like Southeast Asia and the Middle East were similar to India in customer needs and technology requirements. Indian companies stood to gain once they took advantage of this scenario, said Dawar.

Stuart Wilkinson, head of international purchasing, JCB Limited, in his presentation said "India stands to gain significantly on exports since it (sourcing from India) would definitely result in 30 to 35 per cent net savings for global companies."

"This was possible since low labour rates were a key driver impacting overhead, handling, service, maintenance and tooling. India also scored heavily on factors such as economic development, political stability, technological potential, infrastructure, qualified staff and raw material supply," he added.

"A huge opportunity exists since India is a globally accepted brand in information technology and associated services. These were leading the way and the next wave "" the next sunshine sector "" was possibly construction equipment and components companies," said R Dinesh, executive director, T V Sundram Iyengar & Sons Ltd,

The trend also indicates that high cost countries would double their sourcing from low cost country over the next three years and stand to generate around 35-40 per cent savings. "China and India would be preferred countries for this sourcing," he added.