Inventing India 2nd Factory of The World – Target US & EU (C)

Ravinder Singh*, May16, 2012

First paper on ‘Inventing India - Second Factory of the World’ May01, 2012 covered how India missed the opportunities in the past and let China dominate manufacturing. In this traders are short of skills to serve US and EU markets.

While there are ‘Abundant Talent, Skilled Engineers and Resources’ but GOI neither protects their ‘Intellectual Property nor Support Their Projects like it does for Traders. Thus Indian Industry and Entrepreneurs are Reluctant and Unable to Target US, EU and other developed countries that account for 80% of Imports and manufacturing is on decline.’

TRADING LED EXPORTS CAN’T BE NATIONAL POLICY – firstly major importers like Wal-mart source their products directly from manufacturers, thus secondly Traders can’t compete with multinationals, thirdly Traders can’t ensure Consistent Quality and Production, fourthly Traders don’t invest in manufacturing infrastructure and permanently employ production workers, fifthly don’t invest in IPR and Branding and Sixthly but most important Have Short Term Vision and Petty Goals of earning Quick Money.

When India ought to be supporting and promoting Indian Manufacturing, emphasis is entirely short term in supporting and promoting ‘Trade of Low Value Addition, Low Quality and Technology Products to Middle and Low Income Countries.’

Ø      Export of Low Tech, Low Value Additions and Low Quality Products to Third World Countries is ‘Virtual Imports of Pollution, Poverty, Unemployment and Hunger, and Loss of Resources.’

For example in exports of Iron Ore income to India is barely $100 per tone but exports of a tone of Automobile earn $10,000. Indian company making shoes for a famous brand earn $10 per pair that retails for $100 in developed countries. India earns $1.1 per kg from exports of Basmati Rice but Ricetec of Texas retails its own harvest of Basmati for $10 per kg.

Top nine countries account for 50% of $18trillion World Imports and India should target them selling High Quality, Innovative and High Value Addition Made In India Products.

‘A tale of two systems’ compares productivity of German and US car makers. In 2010 US Companies built 2.7m cars down from peak of 16m annually compared to 5.5m by German companies even as wages paid by US Auto Companies are $33.77 per hour compared to $67 per hour in Germany – Indian companies pay just $2.5 per hour.

Inventing India Second Factory of The World – Advantage India

Most of World’s Great Ideas and Inventions Originate In USA – Yet Germany, Japan, China, Korea are much more successful in ‘Commercializing Technologies due to better Management of their Human Resources.’

CEO of Heinz in a BBC Panorama disclosed its marketing strategy – ‘Heinz Sell Beans Can for 49pence at Small Retail Outlets, for 31p at Selfridges Stores, for 21p at Super Stores, and unbranded to schools for 11p.’ Heinz served entire market segment with same quality product.

India To Adopt Four Way Strategy For Manufacturing Exports

1.  Promote and Support Inventing Companies of Qualified and Experienced Engineers to Develop Product and Services for The World Market, Targeting USA, EU and other developed countries in particular.

Ø      Indian Professionals to Take Over Foreign R&D and Design Companies.

Ø      Support SMEs to acquire IPR, Manufacturing Plants and Technologies.

2.  Inviting Foreign High-Tech Companies to Establish their R&D and Manufacturing Units in India with attractive Incentives.

3.  Promote and support Low Tech Indian companies to improve their Quality and Designs to International Standards.

4.  Traders and SMEs to serve Smaller Markets with improved products.

5.  Promote and Support Indian Services Companies in Securing O&M and BOO projects.

India Has Following Advantages

Advantage India One: -  India has qualified Engineers, good percentage educated and trained in foreign countries and work force cost a tenth of USA. 

Advantage India Two: - India is Open Economy – India allows FDI in 51% to 100% in most sectors and allows Indian Companies to ‘Invest in Foreign Countries.’ Thus there is two way Cooperation.

Advantage India Three: - India shall overtake China in Population to become largest single consumer market – thus Foreign Companies locating their factories have large market to serve in India itself.

Advantage India Four: -  India is Most Suitable for Locating R&D centers and manufacture of High-Tech products due to English language skills.

*Ravinder Singh

Inventor & Consultant

INNOVATIVE TECHNONLOGIES AND PROJECTS