The wheel has turned for India
One of the most ambitious programmes that Prime Minister Narendra Modi has launched is the ‘Make in India’ programme. Its focus is to transform the country into a global design and manufacturing hub. According to Dr Shom Nath Chakravarty, a 50 year veteran of rubber and tyre industry and a well-known independent consultant, this initiative has the potential to turn India into a major tyre and automobile/component manufacturing or outsourcing centre as in the case of information technology. The Indian tyre industry has matured and has reached a state, both qualitative and quantitative, which makes it a favourable outsourcing centre, he told Tyre Asia in an interview
TA News Bureau
Dr Shom Nath Chakravarty, one of India’s foremost tyre and rubber industry experts, is upbeat about the country’s research and manufacturing prowess in these special sectors.
“The Indian tyre and rubber industry has achieved international technological standards and they are actively involved in their own R&D efforts for upgradation of their products,” he said in an interview.
Those days are gone when the Indian tyre manufacturers used to look towards Western tyre multinationals for new technologies. The wheel has turned and all major international tyre companies have now entered India and set-up their own ‘make in India’ facilities.
Dr Chakravarty, who heads the Delhi-based Polym Consultants and has been an honorary professor at the prestigious Indian Institutes of Technology (IITs) at Delhi and Kharagpur, says there are clear indications of the maturity of Indian tyre companies.
He is the author of Introduction to Tyre Technology and Rubber Technology and Manufacture of Rubber Products, a definitive volume on rubber and tyre technologies. He is also the President of Indian Elastomer Technology Development Society.
He explains that in the area of automotive rubber components manufacture, the picture however is not rosy as these products are mostly made by certain well-developed companies as well as by a large number of units in the medium and small-scale sectors.
“The latter units do not have modern technology and machinery to produce internationally competitive quality products. They seek to cater to the less sensitive market with price competiveness.”
Today, the Indian rubber industry has to compete with China. Towards this the country has to do much more with regard to technology and scale of production as well as marketing.
It is imperative that there should be government intervention and support to realise India’s true potential in these fields. Such production units should also be given cheaper bank loans and export incentives.
A major impediment in the rapid growth in the rubber and automotive tyre sectors is the absence of sufficient number of technically skilled people. India’s infrastructure is also poor inhibiting its efforts at partnering with leading world manufacturers in the tyre and automotive sectors.
“Tyre and non-tyre industry in India is nearly 50:50 involved in rubber consumption. But a majority of non-tyre industry require several issues that need to be addressed in order to become competitive. Then only outsourcing under ‘Make in India’ plans makes sense, he feels.
India’s immediate requirements are modern technology and machinery, better processing, higher productivity, greater energy efficiency, effective quality control backed by good laboratory facilities manned by appropriately skilled technically qualified manpower.
In the recent past, the government’s efforts in skill development through RSDC (Rubber Skill Development Council) have started showing positive results. Yet what the country needs are effective technical leaders in the medium and small scale industry sectors, he points out.
“They need to implement effective steps for improvement of product quality by going for innovation. There is a need to have a mental paradigm shifting in the Micro, Small and Medium Enterprises (MSME).”
RSDC’s effort on skill development in the rubber field should become more effective. Giving out statistics does not reflect the ground reality. “Statistics is like a bikini – what it reveals is interesting, but what it conceals are vital. Another factor is a lack of interest and discipline in MSME’s rubber sector,” Dr Chakravarty lamented.
Referring to policy issues that the government should take to improve the domestic Innovation Index in which India currently is at the bottom of BRIC nations, he said there is a need to shake up Indian industry’s R&D sector.
For this, there should be heightened interaction among the industry and academic institutions. IITs, the National Institutes of Technology, universities and government research centres of the Council of Scientific and Industrial Research (CSIR) should develop dynamic linkages.
These Institutions have to understand what is needed by the industry and in turn the industry should know what facility these institutions have and what help that they can extend to them.
“Unfortunately this link is still weak, at least in the rubber sector although there are a few well-known research centres that are engaged in the rubber field,” he says.
They include the Rubber Research Institute, which is focusing on biotechnical, biochemical and physiology work, IIT Kharagpur’s Rubber Technology Centre, which is doing work on basic chemistry and rubber technology, and the Indian Rubber Manufacturers Research Association, which mostly works in the commercial field. There are also some university centres that are doing basic research.
However, there is relatively only minimal interactive work with the industry compared to research centres in Western countries. Representatives of the industry and R&D institutions meet mostly at conferences and seminars where research papers and presented.
Moreover, such papers do not represent the latest development. “There is negligible innovation and government laboratories have hardly any impact on the rubber field,” he notes.
When asked about the policies that are needed to ramp up R&D spending by Indian companies, which now allocate less than 1 per cent of their profit on research, Dr Chakravarty explained that such spending is primarily by the government which constitutes about 80 per cent.
“The rubber industry, excluding the tyre industry, does not have the culture of R&D. Mostly they do not comprehend the importance of the role played by R&D activity,” he said.
The fact is that R&D activities could lead to new product development and enhancement of quality, conservation of costly raw materials and energy, reduction of costs that ultimately increase in profits.
“Most of the non-tyre big size units set up the so-called R&D sections to get Department of Science and Technology approval with the sole purpose of tax relief. They do not have even qualified persons to head such R&D activities. This section does the function of only quality control,” he says.
When asked how the Indian tyre and automotive industry can qualitatively improve products and become globally competitive, Dr Chakravarty said the government should perhaps think of brining in legislation to make it mandatory for all the industry to allocate 5 per cent of its profit on R&D. This should be audited by independent experts in the relevant field.
To be competitive, regular interaction with advanced country’s industry should be encouraged through participation in conferences, training courses, exchange programmes, deputation of young people to high standard academic institutes, both domestic and international.
Such people should be encouraged to attend short courses, while the industry should invite experts to exchange views and knowledge. This should be an ongoing process. To encourage innovation, provisions should be made to recognize outstanding work by offering award not only financial but also by acknowledging the researchers’ work.
Initiatives like these will motivate young people who would be encouraged to carry out further development work. There are too many cynics at the higher levels at both in the industry and the government and they give lip service to such plans.
Dr Chakravarty, while reviewing the state of Indian education, mentioned that there are only 10 per cent employable people among the 12 million science and engineering graduates.
It is a worrying situation, he warned, and said the mushrooming engineering, medical colleges, deemed universities etc have become degree manufacturing organisations. Young students coming out of these institutions after spending a fortune of their parents, face a difficult situation when they enter the job market.
“The Indian government has lost control over such institutions and it has failed to ensure proper quality education. The preference for IITs and Indian Institutes of Management derives from the fact that the perceived returns from education in these renowned institutions are the highest.
Corporates come to IIMs and IITs not by taking into consideration the patents and research articles published, but by being persuaded by the fact that the rigorous screening procedures in these institutes are assurances enough that quality students get in.
Under the present situation, to get useful entrants the industry has to strengthen its training departments and invest to impart effective in-situ training to these young people so that they can be deployed usefully.
Alternatively, the industry should tie up with institutions of high calibre and participate in teaching curriculum so that students understand proper perspective of the subject and what is expected of them by the rubber and tyre industry.