Indian manufacturing must move from volume to 'high value': Experts

Industry leaders say India must own product design, improve manufacturing yields and develop materials capabilities to capture more value across the semiconductor supply chain.

Indian manufacturing must shift from assembling products to designing them, said experts at Semicon India on Friday.

 

The focus must not just be “making in India” but also for “making in India for the world”, they said at the conference on the semiconductor and electronics manufacturing industry in New Delhi.

 

“In India, we are mostly focusing on the high-volume assembly of products, and we must move beyond that to focus on high-value manufacturing,” said Pallavi Verma, an Indian Administrative Service officer working with Guidance Tamil Nadu, the state’s nodal agency for promoting investments.

 

A major factor affecting Indian industrial production is process quality, which should be above 98-99 per cent, said Raminder Singh Soin, founder, managing director and chairman of Resolute group of companies. However, India struggles because its processes have yet to mature to a global level.

 

“India has to go towards making for the world. Today India is not even making for India,” Soin said.

 

Ranganathan V, business head, product groups/FATP, Tata Electronics, said: “Indian manufacturers do not get involved early enough in the design process. This means key decisions, such as which components to use and which suppliers to choose, have already been made, leaving them fighting to produce the same product at a lower cost or with small improvements rather than influencing the product.”

 

This, Ranganathan said, pushes companies towards commoditisation, where price and manufacturing efficiency matter more than design and innovation.

 

“The peak volumes and the value capture in a product’s life cycle really happen when we are closer to when the product is being conceived and designed,” said Balaji Thirumalai, partner, Bain & Company, adding that it is important to transition from “assembled in India” to products designed, made and owned by the country for the world.

 

The government should tie corporate incentives to national key performance indicators to drive higher product quality, according to Soin.

 

India lags behind other countries in the processing of rare earths and critical minerals needed for industry, Verma added.