The Indian economy has undergone a structural change over the last

decade, with shares of

agriculture, manufacturing and services in the gross domestic product (GDP)
changing from
28.52%, 24.37% and 47.11% respectively in 1997-98 to 20.83%, 26.78%
and 52.39%
respectively in 2007-08. The share of merchandise trade in GDP increased
from 20.28% to
38.61% over the same period and Indias share in world exports increased
from 0.5% in 1990
to 1.1% in 2006.
Science and Technology has played an important role in bringing about this
transformation in
Indian economy, which is showing a shift from a predominantly agriculture
based economy to
manufacturing and services based economy and is now increasingly
integrating with the world
economy to become globally competitive, as demonstrated by its increasing
share in world
exports. Government S&T departments and agencies have
undertaken or promoted research
and development to provide innovative and contemporary
technologies to industry and Indias
recent growth has been driven by rapid expansion in export-
oriented, skill intensive
manufacturing and, especially, skill intensive services. India is
increasingly becoming a top
global innovation player in bio-technology, pharmaceuticals,
automotive parts and assembly,
information technology (IT), software and IT-enabled services
(ITES) and has already become
the worlds fourth-largest economy on purchasing power parity
(PPP) basis.
Eleventh Five Year Plan approach to S&T has emphasized the following:
Setting up a national-level mechanism for evolving policies and providing
direction to
basic research;
Enlarging the pool of scientific manpower, strengthening the S&T
infrastructure and
attracting & retaining young people to careers in science;
Implementing selected National Flagship Programmes which have direct
bearing on
the technological competitiveness of the country in a mission mode;
Establishing globally competitive research facilities and centres of
excellence;
Kindling an innovative spirit among scientists to translate R&D leads into
scalable
technologies;
Developing new models of public private partnerships (PPPs) in higher
education,
particularly for research in universities and high technology areas;


India's manufacturing sector is on a high growth trajectory. As targeted by
the
National Manufacturing Competitiveness Council (NMCC), it is set to
contribute 25
per cent to the GDP by 2025 compared to the current share of nearly 16
per cent.
Notably, the sector contributed 66 per cent to the nation's exports in FY11
and has
been strengthening at a CAGR of 20 per cent in the last five years.


1.1 Role of manufacturing in the Indian economy
Manufacturing holds a key position in the Indian economy, accounting for nearly
16 per cent of real GDP in FY12 and employing about 12.0 per cent of Indias
labour force. Growth in the sector has been matching the strong pace in overall
GDP growth over the past few years. For example, while real GDP expanded at a
CAGR of 8.4 per cent over FY05-FY12, growth in the manufacturing sector was
marginally higher at around 8.5 per cent over the same period. Consequently, its
share in the economy has marginally increased during this time to 15.4 per cent
from 15.3 per cent. Growth however has remained below that of services, an issue
that has not escaped the attention of policy makers in the country.
Strong growth has been accompanied by a change in the nature of the sector
evolving from a public sector dominated set-up to a more private enterprisedriven
one with global ambitions. In fact, according to UNIDO, India (with the
exception of China) is currently the largest producer of textiles, chemical products,
pharmaceuticals, basic metals, general machinery and equipment, and electrical
machinery. In the coming year, the sectors importance to the domestic and
global economy is set to increase even further as a combination of supply-side
advantages, policy initiatives, and private sector efforts set India on the path to a
global manufacturing hub.




2.1 Indias growing manufacturing exports
Indias manufacturing exporters have played a key role in promoting the sectors
prowess to consumers across the world. While on one hand sectors such as
textiles, and gems and jewellery have been Indias brand ambassadors in global
markets since ancient times, the country has also made its presence felt in key
industries such as engineering goods and chemicals. In fact, analysis of Indias
export data for FY11 reveals that engineering goods had the highest share in
manufacturing exports (40.4 per cent), followed by gems and jewellery (25.2 per
cent) and chemicals and related products (17.2 per cent). Overall, total
manufacturing exports in FY11 grew to USD168.0 billion from USD115.2 billion in
FY10. The sectors exports grew at a CAGR of 19.6% during FY03-11
5.2 Technology development initiatives
Technology is the key to expanding the manufacturing base in the country and
increasing Indias presence in the global market. The government recognizes this
fact and has therefore provided a number of incentives to facilitate technology
development.
Pharmaceuticals: No duty for upgrading technology through the Export
Promotion Capital Goods Scheme
Textiles: A maximum of USD438 million of subsidies on investment of
USD10.4 billion across the value chain under the revised Technology
Upgradation Fund Scheme
Food processing: No import duty on capital goods for 100 per cent export
oriented processing units
The government has also launched a number of schemes for technology
development in micro, small and medium enterprises (MSMEs). These include -
Lean Manufacturing Competitiveness Scheme: Implemented under the
Public Private Partnership (PPP) mode with 42 Lean Consultants , the
project aims to reduce manufacturing waste, and increase productivity
and competitiveness
Design Clinic Scheme: This is a platform to enable MSMEs to avail
expert advice and cost effective solutions to real-time design issues. The
scheme includes two projects Design Awareness and Design Project
Funding
Marketing Assistance and Technology Upgradation: The scheme
focuses to upgrade technology for increasing competitiveness in
marketing. Activities included in this scheme are technology upgradation
for packaging, competition studies, and development of marketing
techniques
Technology and Quality Upgradation: The scheme aims to encourage
MSMEs to adopt global standards so as to improve the quality of goods
produced


Manufacturing Technology Status
Technology development is critical to a country's efforts in improving productivity, efficiency
and
competitiveness of its industrial sector. Factor cost advantages are being replaced by technology
-
related factors such as zero-defect product quality and international certification of firms' quality
assurance systems (e.g., ISO 9000) in determining international competitiveness. Central to
maintaining competitiveness is the ability of producers to respond quickly and effectively to the
changing demands of the international market.
Technological cap abilities can be best described in terms of three levels: the basic level involves
the ability to operate and maintain a new production plant based on imported technology, the
intermediate level consists of the ability to duplicate and adapt the design for an imported plant
and
technique elsewhere in the country or abroad, while an advanced level involves a capability to
undertake new designs and to develop new production systems and components.
Indian firms present a full spectrum of technological capabilities - while there are few firms
close to
the international frontier in terms of product design capability and process technology,
technological capabilities of most players are extremely limited due to growing technological
obsolescence, inferior quality, limited range and high costs. This adversely affects the ability of
the
organizations to respond to the challenges, not only of increasing international competition from
other low-wage countries like China, but also from trade liberalization within the context of
WTO.
Most Indian manufacturing firms appear to be stuck at the basic or intermediate level of
technological capabilities. Though Indian manufacturing industry has mastered standard
techniques
it has remained dependent for highly expensive and complicated technologies.







Food industry technology demand
Food Processing
India is amongst the worlds largest producers of food, producing over 600 million tons of food
products. India ranks first in the world in production of cereals and milk (91 million tons). It is the
second largest fruit and vegetable producer (150 million tons) and is among the top five producers of
rice, wheat, groundnuts, tea, coffee, tobacco, spices, sugar and oilseeds (210 million tons). India also
ranks among the top few in terms of fish and egg production.
The Indian food processing industry is a high priority sector and is estimated to grow at 9-12%.
Agricultural production and food processing accounts for 22% of Indias GDP and employs more
than 70% of its workforce. Indias total food market is estimated at USD 70 billion, of which USD
22 billion is the share of the value- added food products.

There are an estimated 40,000 food processing units in India. However these units are able to
process only a small percentage of production. According to the Indian Ministry of Food Processing,
processing levels are a mere 2 percent in fruits and vegetables, 4 percent in fish and 2 percent in
meat and poultry. The unorganized sector and small players process more than 70 percent of the
industry output in volume terms and 50 percent in value terms.

It is estimated that the industry loses more than 25 percent of its produce due to poor post-harvesting
equipment, inadequate food processing technology and storage facilities. The Indian governments
move to put in place a policy for the food-processing sector is a step in the right direction.


Technology Status
India processes only 2% of its agriculture output . Over 70% of this is processed primarily through
unorganized sector. Therefore the adoption and usage of technologies in the areas of food safety,
preservation, transportation, processing and handling is quite low. Following are the important
market features that determine the types of technologies and processing equipments required by
India:
- The technologies for food processing in India are not at par with the global standards. This is
despite having the capability of design, development and construction of process plant
machinery matching international standards.
- There are many units producing jam, jelly, pickles marketed locally. These units are in the tiny
and cottage sector and do not adhere to F.P.O quality standards. Also, they are reluctant to adopt
new capital intensive technologies.
- There is a lack of in-house quality control and testing facilities in conformity with the
international standards. This is proving to be critical bottleneck in exports of products as nontariff
barriers lead to stringent food import norms in developed countries.
- Poor infrastructure facilities such as irregular power supply, high inland transportation cost and
lack of cold chain facilities etc.
- There is lack of adequate storage facilities and adequate infrastructure to facilitate the
transportation and marketing of processed food products. This continues to impede the
development of large scale processing in India.
Food processing is a high priority sector and several technologies are being developed.



Technology Gaps
India would need food processing technologies and equipment in the following areas: processed
meat, especially poultry, soft/fruit drinks, ready -to-eat/serve snacks, value-added dairy products,
specialty processing equipment for bakery and confectionery items, and thermo-processing. New and
used slaughter line equipment, dairy equipment, sausage casing/sausage making equipment, meat
tenderizing equipment, pizza making machines, mixing tanks, and snack food making machinery are
some major items in demand in India.
Estimated sales revenue for 2003-
2004 for cold storages excluding insulated panels is $28.40 million; coolers is $112 million; freezers
is $26 million; transport refrigeration $9.09 million; and industrial refrigeration $42 million.
The total Indian market for food processing equipment is estimated to increase to $2 billion in 2005.
The total market is expected to continue to grow at an average annual growth rate of 15 to 18 percent
over the next two years. Imports currently account for less than five percent of the total foodprocessing
equipment market. Imported state-of-the-art equipment is much more expensive than
locally available products but offer significant benefits in terms of yield recovery, lower
maintenance and better quality output. Currently, imports from the U.S. represent 30 percent of the
total imports of food equipment into India.






Question = Automobile component industry economic impact and technology available in
automobile component sector.





Machine Tools
Overview:
Machine Tool industry is the backbone of any economy. It is the mother industry of Capital Goods
Sector which in turn determines the share of manufacturing in GDP of any country. The Indian
machine tool industrys growth is directly linked to the growth of the manufacturing/ engineering
industry. The Indian engineering industry, user of machine tools of all types, manufactures goods
worth $32.6 billion.





World Machine Tool Industry and India


Question= Machine tool industry economic impact (gdp contribution) and technology
available in machine tool sector india and world comparision.