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India Needs Automation for Continued Economic Growth

The Indian automation market has acquired the critical momentum to propel the instrumentation, control and automation industry to a higher growth trajectory.

India has the right mix of process industry that provides excellent growth opportunities for the entire spectrum of automation products and systems.

With a gross domestic product (GDP) growth of around 7 percent, India has one of the fastest growing economies in the world, and India is moving steadily on the path of global integration. Amongst other leading indicators, India is witnessing foreign trade growth, rising domestic consumer demand, infrastructure growth, industrial revival, capacity expansion and a significant pick-up in manufacturing output and the capital goods sector. Realization is fast setting in that India’s future cannot depend simply on being the “back office” of the world. Automation has a key role to play in facilitating this quest for being truly world-class and ensuring a “competitive advantage” for the Indian industry.

Automation shortfalls

“From a historical perspective, automation in India has long been seen more as a shop floor tool than a ‘business performance enabler.’ Even where industrial automation has been adopted, the technology threshold is fairly low when compared to world standards,” says Kapil Sibal, Minister for Science & Technology, Government of India. “Moreover, there are many sectoral disparities and significant variations in terms of complexity when it comes to adoption of automation technologies. Lack of knowledge and awareness has been a limiting factor despite the fact that all the major automation technology providers in the world have an extensive presence in India,” Sibal adds.

While Indian industry has accepted and is adopting enterprise solutions for business processes, it has yet to recognize the full potential of manufacturing automation and “collaborative systems.” Automation has been restricted mainly to the technical domain and has not been sufficiently seen in terms of its “business value.” While many companies have adopted enterprise resource planning (ERP) or manufacturing resources planning (MRP2) for business processes, they still have little or no basic plant automation to link up to the enterprise level. As an indicator, the total automation market in China, a country that India benchmarks in terms of economic growth, is nearly eight to 10 times larger than in India.

“India’s economic growth can gather momentum in a sustained manner only when the industrial sector grows alongside agriculture. To achieve the consistent 8 percent to 10 percent GDP growth targets we aspire toward, industry will need to grow at decent double digit levels, increasing its domestic and export contribution significantly,” Kapil observes. “The manufacturing sector has a key role to play here and its progress is closely linked with the adoption of state-of-the-art automation technologies. Regardless of sector, we have a tremendous opportunity to position the Indian industry on the world map,” he adds.

Growth engine

India, with large investments taking place in process industries, provides strong growth prospects for automation in both the near and long term. The growing disposable income in the hands of almost a quarter of a billion people is generating a rising demand for a wide range of products. Manufacturers, lured by this opportunity, have created new production facilities in almost all vertical industries.

Because of this cycle of demand, investment and wealth creation, India is emerging as an economic growth engine. Manufacturers’ search to gain sustainable competitive advantages leads them to extensively use automation.

Uday Lal Pai,, is a freelance writer and editorial consultant based in India.

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