Machine tools are at the core of manufacturing—without a powerful machine tools segment, manufacturing excellence cannot be achieved. Thus, India’s vision to emerge as a global manufacturing hub is closely linked to its capability in machine tools. MTW takes a look at how the machine tools industry is placed to deliver on the Make in India dream and the key challenges it needs to overcome along the way
With the government’s push on ‘Make in India’ campaign, the international spotlight is on the Indian manufacturing sector. As the manufacturing sector ramps up to close its gaps to emerge as a global manufacturing hub, there is one factor whose significance can’t be overlooked in manufacturing’s success. Our ability in machine tools. As a matter of fact, machine tools industry is at the core of manufacturing and the future strength and capability of the Indian manufacturing industry is closely linked to the growth of the machine tools industry.
“Machine tool industry is the mother industry for any manufacturing activity. By and large all manufacturing processes require machine tools directly or indirectly. Thus, the machine tool industry will play a significant role in making Make in India truly successful,” asserts P.G. Jadeja, CEO, Jyoti CNC Automation.
“Machine tool industry is the mother industry for any manufacturing activity. By and large all manufacturing processes require machine tools directly or indirectly. Thus, the machine tool industry will play a significant role in making Make in India truly successful,”
P.G. Jadeja, CEO, Jyoti CNC Automation.
Ronald D’Souza, CEO, PMT Machines puts it aptly,” Machine tools are a part and parcel of manufacturing.”
The fact that both manufacturing and machine tools go hand in hand becomes evident with the fact that the world’s top manufacturing destinations are also producers of high-accuracy and sophisticated machine tools.
“Machine tools are a major cornerstone in the economic development of any country and are reflective of the engineering progress that it has achieved. This is confirmed by the fact that Germany and Japan are often counted among the world’s leading engineering hubs, on account of the technological sophistication achieved by their machine tool industries,” elucidates Ravi Raghavan MD & CEO, Bharat Fritz Werner (BFW).
“Machine tools are a major cornerstone in the economic development of any country and are reflective of the engineering progress that it has achieved. This is confirmed by the fact that Germany and Japan are often counted among the world’s leading engineering hubs, on account of the technological sophistication achieved by their machine tool industries,”
Ravi Raghavan MD & CEO, Bharat Fritz Werner
Raghavan further says that machine tools are crucial both to the success of Make in India and broad-basing manufacturing across the country. “For Make in India to succeed and to enable India’s transformation from a ‘consumer economy’ to a ‘producer economy’, there is a need to achieve significant progress in heavy engineering and capital goods—both of which would require a heavy influx of machine tools to manage its manufacturing activities,” he adds.
So, how is Indian machine tools industry placed currently to play its role as a catalyst in realizing the country’s manufacturing vision? If we look at industry reports and findings, past few years have been encouraging for the Indian machine tools industry, which is slated for further growth in the coming years.
Research firm Technavio estimates the machine tools industry in India to grow at a CAGR of around 13% between 2016 and 2020. The key drivers of the industry are rapid growth of the automotive industry and favourable initiatives by the government, including duty drawbacks and exemptions.
That said, the industry is plagued by several challenges. Firstly, as the production of machine tools is not in line with the consumption, India relies heavily on import. According to the 2016 World Machine Tool Survey by the Gardner Business Media, India ranks 13th in the production of machine tools globally, but it is the 10th largest consumer.
“Due to the demand-supply gap, around 40-50% machine tools are imported,” informs Shrinivas Shirgurkar, MD, Ace Designers, one of the largest manufacturers of CNC lathes in India. “This is typically because 65% of Indian machine tools cater to the automotive industry so other industry segments have to rely on import.”
Another reason why imports occupy a sizable chunk is paucity of special purpose machine tools as India predominantly manufactures low-medium range machine tools.
There is a demand for more flexible machine tool designs that can quickly adapt to new products, as well as for machines that can replace operator with robots which can operate one or multi-machines thus increasing productivity”
Ronald D’Souza, CEO, PMT Machines
“India is currently well-placed in the development and production of machine tools from low to medium levels of technological sophistication such as vertical & horizontal machining centers, vertical & horizontal turning centers and has even succeeded in production of customized machines. But, India is in the nascent stage in development of multi-tasking and multi-processing machining centers,” elaborates Raghavan.
Apart from this, Indian machine tools industry is fairly fragmented, with presence of a number of small players. “Most of the companies in the India machine tool business are small, except 2-3 major players. To grow to the next level, we need more investments and bigger companies,” emphasizes Shirgurkar.
“The fact that machine tools industry is majorly dependent on the domestic market and that too automotive segment is the biggest bottleneck in its growth. To establish India as a brand globally, we need to produce high-accuracy, niche machine tools for a wide range of industries”
Shrinivas Shirgurkar, MD, Ace Designers
To prepare machine tools industry to deliver on the Make in India vision, it has to rise above its current challenges. Primarily, the industry requires vigorous R&D efforts to improve its capabilities in the domain of high-accuracy tools as high-level of excellence in manufacturing cannot be achieved without advancement in machine tool technology.
Adoption of latest technologies to meet end-user requirements like increased volume of production, cost reduction, lead-time reduction, minimal human interference, and more, is crucial. The good news is that the Indian machine tool industry is already experimenting with latest and disruptive technologies to drive innovation.
“Indian machine tool industry is now maturing and has started adapting new and innovative concepts for better productivity through application of technologies,” agrees Jadeja.
The technology push in the machine tools industry is driven by user industries demand for automation and increase in productivity. “There is a demand for more flexible machine tool designs that can quickly adapt to new products, as well as for machines that can replace operator with robots which can operate one or multi-machines thus increasing productivity, states D’Souza.
Another major roadblock in the growth of Indian machine tools industry is its dependence on the domestic market. “The machine tools manufactured in India are mainly for the domestic consumption. Our exports could be less than 10% of the total domestic consumption,” D’Souza shares.
India as a brand is yet to make a mark in the global market. It faces stiff competition from countries like China and Taiwan in terms of pricings and countries like Japan and Germany in terms of technology.
“The fact that machine tools industry is majorly dependent on the domestic market and that too automotive segment is the biggest bottleneck in its growth. To establish India as a brand globally, we need to produce high-accuracy, niche machine tools for a wide range of industries,” asserts Shirgurkar.
The government backing can prove crucial in helping machine tools industry address these challenges and move up the growth ladder. “Majority of the issues faced by the industry can be resolved through a set of right policies and programmes to be pursued by the Government of India in the field of establishing a supportive technology infrastructure in the country,” says Raghavan.
For R&D efforts to bear fruit, Raghavan suggests that the government should encourage global R&D houses to set-up shop in India in partnership with Indian companies. Also, as the machine tools industry is primarily SME-driven, efforts should be made to raise awareness about government schemes and policies even in smaller companies.
“The government is extending investments to encourage the R&D of sophisticated machine tools. However, only big companies are getting benefitted from this. Despite the R&D support scheme, smaller companies are not approaching the government due to lack of awareness,” informs Shirgurkar.
Lack of skills is another area that continues to plague the industry. The government is already taking some measures to tackle this challenge with initiatives like Skill India. To bridge the talent gap and make available skilled manpower, the government should focus more on specialized training programmes.
“The focus should be on building vocation-friendly education and programmes to enable development of skilled assembly production personnel from an early age,” suggests Raghavan.
Indian machine tools sector is standing on the cusp of a major opportunity driven by manufacturing-focused initiatives from the government and robust domestic demand. To deliver on the Make in India vision, the sector’s mantra should be to diversify its range and reduce imports gradually.
Apart from increased investment and focus on R&D activities, the industry needs to create a suitable environment for technology transfer from developed countries.
The outlook for the Indian machine tools industry looks positive in the years to come. By concentrating its efforts on developing sophisticated tools to empower the high-end manufacturing sectors, machine tools industry can enter an era of significant growth.
Article by ……
Shweta Nanda, Assistant Editor
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