About 20 per cent of Indian firms are unable to produce quality products due to their use of obsolete machinery and equipment, a study has said.
"Nearly 20 per cent of Indian companies in sectors like automobiles, textiles, engineering and power equipment are unable to produce quality products as they have obsolete machinery and fail to absorb the latest technology," the study by leading industry chamber Assocham said.
It said that as a result, the defect rates of final products from these firms were higher than in the manufacturing units of the USA, EU and Japan.
The survey said that while India has the technical ability to achieve a high-level of precision, few manufacturing firms are able to produce quality products.
The study said research and development activities in India have been primarily government-driven and private sectors have traditionally made less investment in research and development (R&D).
"...The total R&D expenditure have been about 0.8 per cent of the country's Gross National Product in the past few years, which is quite less compared to other developed nations," Assocham said.
The chamber also said high interest rates, poor infrastructure and high import duty on manufacturing equipment and machinery are the other factors hindering the growth of Indian units.
The chamber has suggested that until these issues are addressed, India's competitive edge in manufacturing would constantly come under attack.
