BY BLOOMBERG | APR 13,
2017, 03.04 PM IST tHE ECONOMIC TIMES
By
Saket Sundria and Dhwani Pandya
Drawn to India by an explosion in metro-rail
projects, Alstom SA and Bombardier Inc are now poised to use the nation known
for being the world’s back-office as a manufacturing export hub.
The
French and Canadian multinationals set up manufacturing and engineering
operations between 2008 and 2010 to tap into India’s rapidly-growing urban
transportation market and will now export to Australia, the Middle East and
Asia from these facilities, company officials said. PricewaterhouseCoopers
estimates total investments in subway projects will reach $230 billion in Asia
over the next 15 years.
Alstom and Bombardier want to exploit India’s large pool of
engineers and cheap skilled labor that have helped turn the nation into a key
center for auto companies including Ford Motor Co. and Hyundai Motor Co. New
export avenues such as metro rail systems are critical to Prime Minister
Narendra Modi’s promised economic rejuvenation. Shipments from Asia’s
third-largest economy must grow about 15 percent a year to ensure the pace of
expansion needed to create sufficient jobs, according to Modi’s top
economic adviser Arvind Subramanian.
Sydney is going to be Alstom’s first project in
Australia and it will supply railway coaches from India, said Bharat Salhotra,
the company’s managing director for India and south Asia. “We will continue to
look at India, not just for addressing the Indian market but for addressing
markets beyond. Exports will continue to be on the radar.”
Alstom
will fill the Sydney metro orders from its manufacturing units in south India
and is looking at the Middle East and Southeast Asia, he said.
Cost
Competitive
Bombardier
has invested about 33 million euros in its Indian manufacturing facility and
has orders to export 450 metro rail coaches to Australia and components to
Brazil, Australia and Saudi Arabia, Harsh Dhingra, chief country representative
of Bombardier India said in a phone interview. The Quebec-based company has
manufacturing capacities in Gujarat state in western India and a transportation
engineering services center in Gurgaon, near New Delhi.
“We will look at opportunities to export from India to other
countries in the region,” he said. “India is a low-cost set up. That is why our
exports are going out of India.”
India has already emerged as a base from where
the likes of Hyundai, Ford, Renault SA and Suzuki Motor Corp. export cars to
Africa, South America and Europe. The South Asian nation shipped 3.5 million
vehicles in the year ended March 31, just below a record in the previous year,
according to the Society of Indian Automobile Manufacturers.
While the government has tried to spur the
manufacturing sector via its “ Make in India” push, the nation still ranks
130th in the World Bank’s ease of doing business ranking, slowing the pace of
investment. It has fared better on the services side: The information
technology industry is the nation’s largest private-sector employer, providing
a livelihood to nearly 4 million.
Future
Path
The domestic and regional opportunity for transportation
companies only looks to be growing.
At least ten Indian cities are working on metro
railway projects and the government initiated a plan in 2012 to study the
feasibility of such networks in all cities with a population of more than 2
million. Most cities with ongoing projects require companies that bid for
supply contracts to manufacture in India, which led to the setting up of
facilities in the country.
More than 500 billion rupees ($7.7 billion)
worth of metro projects are underway in India and this pile will probably grow,
according to Manish Agarwal, leader - infrastructure at PricewaterhouseCoopers.
“All of this implies sufficient scale for parts
of manufacturing to be located in India,” he wrote in an emailed response to
questions. “The manufacturing base can then also serve the growing market in
other parts of Asia (Dhaka, Colombo, etc) as also Africa (Mauritius, among others).”
Read more at:
No comments:
Post a Comment