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Comments on National Manufacturing Policy, A Discussion Paper

We believe that a strong manufacturing sector is an essential component of the Indian economy. While the sector has undergone a period of change, the resulting structural adjustment has ensured the sector’s continued relevance as a contributor to GDP.

To compete internationally, Indian manufacturing sector would need a strategic vision and mission. A strong manufacturing sector warrants a superior level of operational freedom and integrated programs between industries and the government. Collaboration between manufacturers needs to be facilitated, as doe’s promotion of opportunities.

It is essential that the Govt. works on new and innovative ways to encourage and assist manufacturers to remain internationally competitive.

It is pertinent to note that the skills in the engineering, science and technology professions are vital to ensure competitiveness and economic prosperity of the Indian manufacturing sector.

We strongly fee that National Manufacturing policy should be duly supported with a National Skills Strategy.

Institutional Framework:

• NMP should provide that the SPV can manage more than one investment zone

• It is very important that the SPV should have representation of entities relevant to the licensed activities as this would ensure that all stake holders are on a common platform.

Green Technologies:

• Although NMP talks about promoting Green Technologies yet it does not offer enough incentives to innovate and promote green technology beyond end-of-pipe solutions. NMP does not have policies focused sufficiently on environmental concerns.

• It is humbly submitted that realising the potential of eco-innovations will require actions to ensure that the full cycle of innovation is efficient, with policies ranging from investment in research to support in commercialising breakthrough technologies.

• NMP should promote initiatives and programmes that promote green technology and should include both supply-side and demand-side measures.

• The Ministry to recognise the need for a more collaborative approach to innovation, which should involve in creating networks, platforms or partnerships that engage different industry and non-industry stakeholders.

• NMP should create a platform which focuses on Demand-side measures because insufficiently developed markets are often the key constraint for green technology promotion and innovation.

• The concept of creating fund to support research is not quite clearly described. We suggest that the Govt. should consider floating a fund on the line of Technology Commercialization Fund <>, as promoted by United States Department of Energy TCF complements “angel investment”, or early- stage corporate product development. The TCF brings the United States Department of Energy’s national laboratories and industry together to identify technologies that are promising, but face the “commercialisation valley of death”.

• We once again stress the importance of education and training programmes which is critical for developing the human capital for “green jobs”. We also suggest that measures be taken to introduce environmental education in the school curricula or vocational training.

NMIZ and SEZ:

• It is not clear what would be the fate of SEZ’s after introduction of NMIZ.

• How would the SEZ’s and EOU’s become part of NMIZ’s? .

Bottlenecks:

Whilst the Draft National Manufacturing Policy 2010 <> holds great promise. There are several critical areas in the manufacturing chain that could derail India’s effort to becoming a manufacturing centre. We are of the opinion that National Manufacturing Policy in its draft form does not provide or support the debottlenecking the following obstacles:

• The key obstacle for India is its poor infrastructure, especially in ports and shipping and power. These are important factors and the Commerce Ministry should come out with clear plan on how it proposes to encourage investment significantly in infrastructure. Since all these subjects are dealt by different ministries, it is important that a joint or coordination committee of Under Secretaries of respective Ministries is formed in order to facilitate a coordinate’s development of various infrastructure facilities which would provide impetus to the concept of NMIZ’s.

• Equally important is the need for India to build the reputation of the “made in India” brand label. India Brand Equity Foundation (IBEF) which is a public-private partnership between the Ministry of Commerce and Industry, Government of India, and the Confederation of Indian Industry should rigorously focus on building positive economic perceptions of Brand India globally.

• Reputation of high quality and delivery has to be developed and this should be supported by a large number of product quality testing laboratories to meet environmental and sanitary standards required to sell in the global market. One suggestion is to upgrade university laboratories by encouraging industry-government-university collaborations.

• NMP does not provide for strategy to decrease dependence on foreign know-how by developing domestically-controlled intellectual property (IP). The indigenous development of would secure technological independence and reduces burdensome royalty payments by Indian Companies.

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