The hand tools cluster at Jalandhar and Ludhiana, the majority of whose units are in the MSME sector, is likely to get a shot in the arm with the setting up of common facility centres (CFCs).
The setting up of CFCs in the two cities, which account for 75-85 per cent of India’s total hand tools exports, will enable MSMEs to get their work outsourced, assist them in adopting new technology and in carrying out research and development. This was a long-pending demand of industrialists.
The CFC at Jalandhar is being sanctioned by the department of industrial policy and promotion (DIPP), ministry of commerce, while the CFC at Ludhiana has been sanctioned under Assistance to States for Development of Export Infrastructure & Allied Activities (ASIDE), also under the ministry of commerce.
The total project cost of the Jalandhar centre is Rs 83 crore. Under the DIPP scheme, the centre will be set up with 75 per cent financial assistance from the Union government, 10 per cent from the state government and the remaining 15 per cent from cluster members. For execution of the project, members have already created a company called Indian Tools Technology Centre (ITTC).
The Punjab government has agreed to lease eight acres of land in Jalandhar for the proposed centre. The company will soon sign the lease agreement with the state government. The centre is likely to take 18-24 months to complete.
Speaking to Business Standard, ITTC Director Jyoti Parkash said, “The centre will be a panacea for the hand tool industry. It will provide a plethora of opportunities for the MSME sector. Industrialists can outsource their work, get R&D benefits and adopt new technology, which will save input costs drastically.”
He added, “We are importing state-of-the-art machinery and the latest technology from Taiwan, especially Cold Forging Technology and Blue Moulding Technology.”
Echoing similar sentiments, Engineering Export Promotion Council Regional Chairman S C Ralhan said, “It will be beneficial for the entire hand tool industry, as it can get exposure and avail the benefits of state-of-the-art machinery, which they can’t afford, as the majority of them are in the MSME sector.”
He said one such centre is also coming up in Ludhiana under the ASIDE scheme of the ministry of commerce, which would be operational by September this year. He added, “The total cost of the project is Rs 14 crore. We have converted the existing institute, called Institute for Auto Parts, into the Institute for Auto & Hand Tool Technology. Also, we have imported machinery and we expect that the centre will start functioning by September this year.”
Jalandhar and Ludhiana together account for 75-85 per cent (Rs 1,000 crore) of India’s total hand tool exports. The hand tool industry of Punjab employs nearly 60,000 people and consists of about 250 units, the majority of them in the SME sector in Jalandhar, while Ludhiana accounts for 100-150 units.
The major export markets are the United States and the European Union, and the exporters supply hand tools to major retail chains like Wal-Mart, B & Q and Home Depot.
