India in the Global Supply Chain
India: A Growing Link in the Global Supply Chain
A look at the nation's success stories, and the challenges that persist, in autos, oil, power, steel, and electronics
With more than 500,000 new engineering graduates each year, India is in a strong position to be an engineering powerhouse. But while India is one of the biggest players in the services and information technology sector, the same cannot be said of our supply chain and engineering capability. India's manufacturing exports still amount to less than 10% of gross domestic product, whereas more than one-third of China's GDP comes from manufacturing.
India still doesn't have the most congenial business environment. Bureaucratic hurdles and a tough approvals system for setting up new businesses are not as severe as in the past, but they continue to create bottlenecks. Land acquisition is a major hindrance to setting up new plants, as the problems of Tata Motors in West Bengal last year demonstrated. Illiteracy and unskilled labor are disincentives to modern organizations that thrive on high productivity. So, too, are infrastructure problems such as clogged ports and roads, power failures, and water shortages.
In spite of these many challenges, India is slowly but surely making a mark in the global supply chain. We are still a long way behind China and Japan, but there has been definitive progress. Here, the challenges and success stories, by sector.
Automobiles
The Indian triumph in the auto supply industry is well known. A small set of Indian manufacturing companies are vendors of choice for global automobile multinationals that purchase small parts. These suppliers are valued for their reliable, high-quality products and on-time delivery. Four Indian auto parts companies have received the coveted Deming Prize for excellence in quality. The next challenge for Indian component suppliers is to upgrade from supplying simple parts to complex assemblies and transmissions.
The transition to high-end
A look at the nation's success stories, and the challenges that persist, in autos, oil, power, steel, and electronics
With more than 500,000 new engineering graduates each year, India is in a strong position to be an engineering powerhouse. But while India is one of the biggest players in the services and information technology sector, the same cannot be said of our supply chain and engineering capability. India's manufacturing exports still amount to less than 10% of gross domestic product, whereas more than one-third of China's GDP comes from manufacturing.
India still doesn't have the most congenial business environment. Bureaucratic hurdles and a tough approvals system for setting up new businesses are not as severe as in the past, but they continue to create bottlenecks. Land acquisition is a major hindrance to setting up new plants, as the problems of Tata Motors in West Bengal last year demonstrated. Illiteracy and unskilled labor are disincentives to modern organizations that thrive on high productivity. So, too, are infrastructure problems such as clogged ports and roads, power failures, and water shortages.
In spite of these many challenges, India is slowly but surely making a mark in the global supply chain. We are still a long way behind China and Japan, but there has been definitive progress. Here, the challenges and success stories, by sector.
Automobiles
The Indian triumph in the auto supply industry is well known. A small set of Indian manufacturing companies are vendors of choice for global automobile multinationals that purchase small parts. These suppliers are valued for their reliable, high-quality products and on-time delivery. Four Indian auto parts companies have received the coveted Deming Prize for excellence in quality. The next challenge for Indian component suppliers is to upgrade from supplying simple parts to complex assemblies and transmissions.
The transition to high-end