Industrial automation in India – a component manufacturer’s perspective

Industrial automation in India – a component manufacturer’s perspective

This article was first Published in the February issue of the Machinist Magazine, the magazine company of the Times of India Group.

By Anil Kumar, Director, Inovance Technology India

I believe there will be a strong future for the Indian manufacturing sector, and that this future will be highly automated. This is something I see both in a wider sense, and in my own professional life. In the wider sense it is clear that India, with its young, large, and growing population, and with the large number of skilled technology and engineering graduates we produce, has big strengths that will lead to manufacturing growth.

But in a professional sense I see the potential too, through the strong and ever-growing performance from our company’s local industrial customers. Our company, Inovance, sells industrial automation kit such as AC Drives, HMIs, PLCs, Servos to factories and machine builders, and we’ve seen significant sales growth since the relaxation of COVID restrictions.

It is also clear that, as Indian industrialists, our government is behind us. We’ve seen this recently in announcements surrounding the new national budget. One example is the new ‘go vocal for local’ campaign. What I see in this campaign, and the accompanying funding for Indian manufacturing that has been made available, is less an attempt to shut out foreign business, and more an attempt to support Indian companies to compete with global manufacturers, and also to increase their exports.

Machine tools and industrial machinery

Every day in my work I sell to and talk to Indian manufacturers of machine tools and industrial machinery. And every day I hear stories of strong growth in these sectors. I am confident that India’s small and medium sized OEM machine builders are really well placed to thrive in the coming years because of the strong engineering and technical skills in this country. Manufacturing machinery is one Indian sector that really should be well placed to grow its exports, since transportation costs are a small fraction of the cost of an industrial machine. And India since surely has the technical skills to build world-leading manufacturing machinery.

Mass manufacturing and low skilled labour

I also see strong potential for growth in the Indian mass manufacturing sector – in everything from clothing to automotive manufacturing. If there is one single problem that India’s mass manufacturers face, it is substandard infrastructure. And here I believe the government could really help by improving our road and rail network – as I know they plan to do. Yet, even in spite of infrastructural issues, the immense and growing size of the Indian domestic consumption market makes growth in domestic mass manufacturing highly likely.

From a factory automation perspective, while India has a reputation for unskilled labour, it is still true that Indian labour costs are growing and, as the population as a whole gets wealthier, this is a trend that will accelerate. Moreover, even the most manual factory still has a heavy element of basic automation within it, such as conveyors and cutting machines. And, at the end of the day, labour cost is not the only thing that drives automation. As Indian manufacturers ramp up their exports, they will need to improve product quality, reliability, and time to market; and automation can help with all of these issues by introducing precise and repeatable manufacturing processes that are just not possible for human workers on their own.

In the medium-term, global economic growth means the world is looking to India to become a global manufacturing hub. And we already see signs of success at this, such as the inspiring example of the involvement of the Indian pharmaceutical sector in supplying the COVID job to millions in the UK. As well as the very recent news that Tesla plans to set up an electric car manufacturing plant in Karnataka.

Warehouse automation

Another sector that I think is going to be of interest for the long term is warehouse automation. According to India’s national investment agency, India’s eCommerce retail market, which was $30bn in 2019, will grow at a CAGR of 30% to be worth $200bn in 2026. This is just one factor causing growth in Indian warehousing. Clearly, in the short-term, low labour costs will prevent the fully automated solutions that are common in the warehouses of countries such as the USA. But the use of conveyors and other simple automation equipment is common in Indian warehouses even today. And smaller and more innovative online retailers may automate sooner as a way to gain a competitive edge. In the long run, if Indian eCommerce retailers want to offer reliable same-day-delivery slots, then efficient warehouse automation will be key.

Automation components

When it comes to the vendors of industrial automation kit such as industrial robots or industrial PCs, these are highly specialist products and they tend to be manufactured by a small number of global specialists. That will not change. But increasingly, as Indian manufacturing and machine building grows, these companies will tend to open local manufacturing sites in order to better serve local customers. This is a trend we see today, and I am certain that it is a trend that will also continue.

To learn more about the industrial automation solutions Inovance can offer, please get in touch with me directly on Anil.Kumar@inova-automation.com