The Hindu : Govt., CII initiative to boost outsourcing opportunities

Online edition of India's National Newspaper
Saturday, Feb 08, 2003

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Govt., CII initiative to boost outsourcing opportunities

By Our Special Correspondent

NEW DELHI FEB. 7. The Union Government and the Confederation of Indian Industry (CII) should jointly work together to target foreign manufacturing companies with the objective of substantially increasing the outsourcing requirements of these companies from India. This was stated by the Secretary, Ministry of Heavy Industries and Public Enterprises, Naresh Narad, at the inaugural session of a conference on `Indian Manufacturing: Global Outsourcing Opportunities', organised by the CII, here today.

Commenting on the huge global outsourcing opportunities that exist for Indian manufacturing, Mr. Narad said the government would work to remove procedural difficulties and the CII would help in finding buyers and short-listing suppliers. "Let the government and the CII together target a dozen foreign companies with the aim of getting them to outsource ten times more than what they are already doing over the next two to three years," said Mr. Narad.

Pointing out that Indian manufacturing is growing at 6.5 per cent per annum, Mr. Narad said the challenge was to propel Indian manufacturing into a 11 per cent growth orbit. "One of the ways to achieve this would be to dramatically increase exports of manufactured goods. Outsourcing is a good way to increase manufacturing exports". "There are many global companies which are looking at lower cost, but high quality, suppliers for their components and sub-assemblies. India, with its diverse manufacturing base, large pool of trained manpower and raw material supplies can become an integral part of global manufacturing chain as it has become a part of the global IT chain," he said.

On the issues facing the capital goods sector, Mr. Narad said the Heavy Industry Ministry had set up an Inter-Ministerial Group focussing on growth of capital goods industry. This group will co-ordinate and reconcile the inter-ministerial issues vital for the growth of the capital goods sector. The government has also set up a task force on exports whose objective is to prioritise exports of capital goods.

The chairman, the CII, manufacturing council and industrialist, expressed concern about the low level of manufacturing activity relative to the size of the Indian economy. He identified high incidence of indirect taxes on the manufacturing sector and high cost of finance as two major factors hampering the growth of Indian manufacturing.

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