The $18-billion Indian foundry industry, witnessing negative or flat growth in the past few years against 12 per cent annual growth till 2011 due to apathy, is looking for a turnaround with the Union Government initiating steps to address its problems so that it can contribute to the ‘Make in India’ initiative.
“A beginning has been made. The government is taking active interest to resolve our problems. A development council has been set up which is exclusively working for our benefit,” said Vikas Garg, President, The Institute of Indian Foundrymen, the apex body of the foundry industry.
“The government can intervene is several ways. We would need about Rs.5,000 crore to improve energy efficiency, upgrade technology and develop skill so that we can grow three fold in 10 years,” he said.
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In February this year, the government established several development councils for smaller sectors such as foundry, which does not have a full-fledged ministry to look after their cause.
Amitabh Kant, Secretary, Department of Industrial Policy and Promotion (DIPP), was entrusted with the task to head the Foundry Development Council. Since then, he has initiated actions to address the problems afflicting the industry.
Amarendra Sinha, Special Secretary, Ministry of Micro, Small and Medium Enterprises (MSME), was also devising strategies to upgrade the competitiveness of MSMEs engaged in this sector through different policy interventions, said industry officials.
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This industry is crucial for the success of engineering and manufacturing industries. Eighty per cent of the 4,600 units that constitute this industry are from the MSME sector and need attention. About 20 lakh people are employed in this industry that is spread across 17 clusters across India.
Mr. Garg said, “The ban on mining affected supply of silica sand, which is a major raw material for the foundry industry. Though some supplies have been restored, many units are still operating at 40 to 50 per cent of their capacity. Levy of import duty on scrap materials has increased raw material cost and tougher environmental norms have affected the growth.”
He said India, being the third largest foundry market after China and the U.S., was facing competition from China. “Import from China is a major concern. To reduce their dominance, funds need to be allocated for the upgradation of technology. We need funds to innovate and create a global presence,” he said.
The industry has asked the government for specific policy interventions in the form of facilitating loans for buying energy-efficient equipment, providing subsidy for technology upgradation and deployment of eco-friendly equipment.
Snippets
Sales revenue: $18 billion
Exports: $2.5 billion
Casting volume: 9.8 million tonnes
Growth before 2011-12: 12 per cent
Total units: 4,600 in 17 clusters
Industry requires: Rs.5,000 crore aid