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Indian Manufacturing- Contradictory trends

Today I read two contradictory news and that shows the trend of Indian business houses. I had written a post that Indian manufacturers will turn into traders and service providers and manufacturing will be dominated by Multinationals. The news below....

Tata group has said it will focus on the four key areas of defence and aerospace, realty and infrastructure, consumer and retail, and financial services.

By 2020, Maruti Suzuki will contribute 60% to its global sales: 

We will be exporting our newly launched Baleno (hatchback) to Japan. This is the first time we are exporting to Japan. This model is only being manufactured in India. In 2016, we expect to export 50,000 units of this model.

 What does these two statements convey??  

Tata groups highest contributor in profit has been TCS out of 100 odd companies under its umbrella. The log term plan is to shift to Defence, Aero space where they shall get in technology from countries like Israel and reality, which will be like earning money from Indians in India and retail again means representing foreign brands in India, and financial services which is again earning out of Indians. Where is the agenda for developing something for the world and get foreign exchange for the country except TCS back end services. 

On the other hand a foreign company is using Indian soil to export 60% of its car for the world from Indian soil. 

This is a clear signal that Indian companies big and small are shying away from R&D and manufacturing export worthy product instead investing in services like software and online trading of merchandise.  

This is a dangerous situation for grass root employment and balance of trade. The priority for India is employment to people who are not educated and that will require all kinds of manufacturing to be motivated rather than leveraging availability of English speaking talent pool which hardly will be 5 to 10%  at the most. 

Indian manufacturers are turning into traders where as manufacturers from other countries are using Indian soil to sell to Indians and also globally.

 



 

 


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