NYU Stern Hosts Conference to Assess the Globalization of Indian Manufacturing

NYU Stern’s Global Business Institute recently hosted a conference with industry leaders, government officials, and academic researchers to map the globalization of Indian manufacturing. Organized jointly with the Center for Global Logistics and Manufacturing Strategies of the Indian School of Business, Deloitte Research, and the Krannert School of Management at Purdue University, with support from the National Science Foundation, the conference, which is entitled, The Summit of Indian Manufacturing Competitiveness, was held in Hyderabad, India, where more than 200 experts assessed the challenges and opportunities of manufacturing in India.

The result of the conference is a report released in April, entitled, "Globalizing Indian Manufacturing; Competing in Global Manufacturing and Service Networks."  According to the report, while the Indian manufacturing sector has continued to grow at a rapid pace over the last decade, there remain significant challenges to achieving world-class prominence. These challenges include the need to further expand domestic enterprises by significantly increasing productivity and quality at the plant level, boosting investments by global manufacturers from abroad by successfully integrating into the global supply chains, and, most important, cultivating innovation capabilities by pursuing worldwide competitive manufacturing strategies and operations. "Innovation is probably the most underexploited strategy for the Indian manufacturing industry," said Kumar Kandaswami, director with Deloitte Touche Tohmatsu India Private Limited. 

Sridhar Seshadri, Toyota Motor Term Professor at NYU Stern, co-authored the report and spoke at the conference about the competitiveness of Indian manufacturing industries, specifically the auto components industry. Bernard Yeung, Abraham Krasnoff Professor of Global Business and the interim director of the Global Business Institute at Stern, discussed how India can learn from China's growth. Vishal Gaur, NYU Stern assistant professor of operations management, gave a presentation on demand management in retailing.

Overall, researchers suggested that both domestic and multinational manufacturers operating in India need to rethink their operating models to take advantage of spectacular growth rates; many leading manufacturers in India today enjoy an average annual revenue growth of nearly 20 percent.  If investment rates keep up with those growth rates, then, in just a few years, the vast majority of investments in those companies will consist of new investments, which is a unique and rarely matched opportunity.

In addition, due to the availability of low-cost, well-educated, and highly skilled talent, India is a top destination for R&D investment. Recent trends show that many multinational companies in all manufacturing sectors are establishing or increasing investments in R&D centers in India.

Finally, despite a modest 17 percent share of gross domestic product (GDP), the experts see a bright future for manufacturing in India if the industry finds a balanced approach to developing its manufacturing and operational capabilities and to supporting infrastructure and services.

Download the complete report.