IS India likely to get the most favoured nation status as far as popularity of our exports goods is concerned? Though the `made in India’ brand is still at a very nascent stage, there is a positive movement towards the brand’s acceptance, industry insiders reveal.
Multinational companies, which are using their Indian operations as an export base, however, have a distinct advantage, over regional players.
A clear indication of this paradigm shift in the business focus of consumer durables and electronics companies is visible by the fact that MNC player, Whirlpool of India Ltd today enjoys the distinction of being one of the largest exporters of home appliances from the country.
According to Mr Rajiv Kapur, Director-Exports, Whirlpool of India, “Contribution from exports to the total turnover of the company is likely to go up to 10 per cent this year from 8 per cent last year.”
Currently, the company is exporting refrigerators and washing machines to South Asia, Asia-Pacific, Latin America and West Asia. Next year will see the company manufacturing at its Pondicherry unit small kitchen appliances under its `Kitchen Aid’ brand for exports to the US market. Products under the brand include coffee making machines, coffee grinders and portable ovens.
“Exports out of India commenced in 1998 and we have been consistently targeting a 25 per cent growth year on year. We are expecting the revenue from exports to touch Rs 100 crore and above by next year,” he said.
To compete in the global market, the company has set up its own distribution channel for South Asia. For providing proper after sales service, the company has strategic third party tie-ups. “We provide technical support to them,” he explained.
Commenting on this movement, a Consumer Electronics & TV Manufacturers Association (CETMA) official pointed out, “Over the last four-five years, due to intense competition, almost all players have cut down costs, thereby making the domestic market very competitive. Earlier, the players were not ready to compete with the Chinese, now because of intense competition in the domestic market as well, the players – especially the regional players “” are willing to face competition.”
Concurring with the view of CETMA, Mr Kapur said, “Earlier, if you wanted to export you had to be globally competitive. But now you have to be globally competitive to compete in the Indian market as well. In fact, today we compete with our own outfits overseas.”
On developing India as a strategic production base, rating agency ICRA.
ICRA states, “In addition to proximity to a vast market for their goods, another strategic vision of multinationals for entering India was to set up a production base in India, which could cater to the regions of South and South-East Asia.”
According to analysts, the key factor considered was the low rate at which they could procure skilled labour. After consolidating their market in the country, multinationals such as Whirlpool, LG, and Samsung are looking at harnessing their production capacities for overseas markets. In fact, major Indian players such as BPL and Videocon are also eyeing the overseas market, ICRA said.
From agencyfaqs.com