India sees potential in industrial sub-contracts

India said the sub-contracting experience of the industrial sector should be replicated in services like information technology, banking and accounting to ensure global competitiveness.

"The sub-contracting process is considered the cornerstone of the industrial and manufacturing sector and is being effectively used and implemented by engineering giants the world over. This ensures a competitive edge, allowing the primary industry to grow rapidly in a healthier environment Such sentiments should be encouraged and replicated in other growth sectors and services sectors," SN Menon, special secretary in the commerce department, said in his keynote address at the Euro-India Business Meet on industrial sub-contracting.

Menon's comments come at a time when there is a backlash against outsourcing of services in countries like the US and a number of legislation have been passed to restrict such activities.

Menon said the sub-contracting market segment in the European Union accounted for over $400 billion and 15 per cent of its output.

The Indian sub-contracting and sub-assembly industry has developed considerable expertise in foundry, forging, precision machined components and other engineering ancillary products, according to Menon.

He said global majors in automobiles and other industrial engineering sectors have had a long-standing, mutually-beneficial partnership with the Indian sub-contracting industry.