‘India ideal for manufacturing products with low logistics’

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: China is the world’s manufacturing destination. India, yet, seems to be catching up. In its report ‘Innovation in Emerging Markets: Strategies for Achieving Commercial Success’, an outcome of a survey conducted by Deloitte Touche Tohmatsu among 420 executives from manufacturing companies with $1 billion or more in annual revenues, 16% respondents preferred to invest in India for planned R&D; China trailed with 15%. Does this mean India is becoming more attractive? Gary Coleman, global MD, manufacturing, Deloitte, explains to FE’s Satya Naagesh Ayyagary the advantages and disadvantages of India and China and how India can cash in. Excerpts:

How would you rate Indian manufacturing’s competitiveness?

In absolute terms Indian manufacturing in sectors can compete quite well globally. You have examples of that in the automotive and other sectors. For the Indian manufacturing industry to continue to grow faster and get a fair share ? looking at the available labour pool of 400 million people, business and the government can do much to improve competitiveness.

Apart from automobiles, what are the other sectors, in your opinion, in which India can be competitive?

I think India has a competitive advantage in the industrial manufacturing side. However, if you look at consumer manufacturing, that’s going to be quite different. It might be more competitive to focus on industrial products that are business to business like machines or hardware components such as ball bearings, machines tools and dies—anything that goes inside a machine which present greater opportunities.

How does India rate vis-à-vis China in the manufacturing sector?

India has its own advantage of a vast pool of technical and scientific manpower that is English-speaking which is evident in the success of IT and BPO sector. The skills required in complex manufacturing are not just for the shop-floor. What China invests in infrastructure as a percentage of GDP is nearly twice of what India does. Their airports handle more traffic, their seaports are more efficient with less turnaround time. Products are sent quicker over-land.

According to your survey, large manufacturers currently have 60% of their R&D operations in China compared to 40% in India. But planned R&D operations are 15% in China, 16% in India.