To help reduce imports and make India an export hub for the tooling sector, government intervention is critical in helping to set up clusters and large scale institutes for development and localisation as has been done in other countries such as Korea and Taiwan, Ashim Sharma, partner and group head at NRI Consulting and Solutions said.
The tooling industry plays a key role in the manufacturing value chain by providing dies and moulds needed for mass production of various parts, forming the backbone of industrial growth.
According to a report by NRI Consulting and Solutions, which Mr. Sharma has co-authored, the market size of Indian tooling industry stands at ₹15,000 crore, with more than half of the total demand attributed to the automotive and auto components sector.
“Most major global auto manufacturing hubs have a robust domestic tooling industry, with India being a notable exception, where a significant portion of tool demand is still met via imports,” Mr. Sharma said, adding that 70% of the tooling imports are by auto OEMs due to the absence of a strong tooling ecosystem in India.
Elaborating on the role of the government, Mr. Sharma said globally support has been provided by giving access to capital at low rate, helping the industry to invest in the technology and machines.
“The second is also setting up large scale institutes for developing technologies. If you take examples from Korea and Taiwan, the government intervened and set up these large scale institutes that worked on tooling technology…and these countries became export hubs. It is critical that the government intervenes here,” Mr. Sharma said.
He also added that the government and OEMs need to work together to develop clusters for the tooling industry.
The need for focus on this industry becomes more important amid current geopolitical tensions. “If you want to make something you have to start with tooling… and if you don’t have that within the country…over dependence on import could also hamper supply chain competency,” he said, adding that tooling could help Indian increase share of manufacturing in GDP while also creating jobs as it is a labour-intensive sector.