Global Manufacturing Hub

India is fast emerging as a global manufacturing hub with a large number of companies shifting their manufacturing base to the country. Moreover, India has the largest number of companies, outside of Japan, that have been recognised for excellence in quality. As many as 21 companies have received the Deming Excellence awards; 153 companies have achieved Total Productive Maintenance (TPM) Excellence Award for their total productivity management practices by the Japan Institute of Plant Maintenance (JIPM) committee.

Moreover, according to Mr A Raja, Union Minister for Communication and Information Technology, the government is aiming to make India a global manufacturing hub for telecom by facilitating various policies.

• Japanese automobile major, Yamaha, is planning to make India a hub for manufacturing its premium and deluxe bikes for overseas markets. The company's Indian unit supplied 66,904 bikes in fiscal 2010 to Yamaha's global operation compared with 38,639 units in 2008-2009, an increase of 73 per cent.
• According to a report by RNCOS, "Global Vaccine Market Forecast to 2012" published in February 2010, the vaccine market in India is forecasted to grow at a CAGR of around 23 per cent from 2009-10 to 2011-12. India has emerged as a new hub for vaccine manufacturers from across the world.
• VE Commercial Vehicles (VECV) is investing US$ 61.9 million in its Pithampur plant for the production and final assembly of Volvo's new global medium-duty engine platform. The expanded facility will act as a global manufacturing hub for Volvo group's requirements.
• Nokia's manufacturing facility at Sriperumbudur near Chennai crossed production volumes of 350 million handsets in April 2010. Nokia is now exporting to North America, Europe, Middle East, Asia, Australia and New Zealand, according to company statement.

Government Initiatives

The government has issued the new Consolidated Foreign Direct Investment (FDI) policy document, which has come into effect from April 1, 2010.

Moreover, as per a press release by the Ministry of Commerce and Industry, the government is working on launching a National Manufacturing Policy by the end of 2010 and has already circulated a discussion paper, inviting comments from all stakeholders in this regard.

According to Mr Anand Sharma, Union Minister for Commerce, the government is also planning to establish National Manufacturing and Investment Zones (NMIZs) to push the manufacturing share in gross domestic price (GDP). The proposed National Manufacturing Policy for these NMIZs would act as the key enablers in driving the growth of the sector in India, as per the press release.

Main objectives of NMIZs are:

• To promote investments in the manufacturing sector and make the country a hub for both domestic and international markets
• To increase the sectoral share of manufacturing in GDP to 25 per cent by 2022
• To double the current employment level in the sector; and
• To enhance global competitiveness of the sector

Exchange rate used: 1 USD = 46.61 INR (as on May 2010)