Sunday 23 November 2014

Scope for Unskilled Labor in India is at Its Peak Thanks to Auto Majors

Increase of domestic demand in power, automotive, electrical and textiles sectors had led to a rapid growth in the Indian foundry industry.  Since the year 2005 onwards, casting capacity had doubled to almost 10 million metric tons, taking India to fourth largest producer of casting components.  This industry which is diversified with more than 10,000 unskilled players offers jobs to more than 100,000 unskilled hands and indirectly hires more than 5.5 million unskilled workers in India.  The casting hotspots are concentrated in 5 geographic locations in India; Coimbatore, Batala/Jalandhar, Rajkot, Kolhapur and Belgaum in Karnataka.  More than 40% of these castings parts are used in automobile industry and rest are used in engineering and electrical sectors both of which provide for upcoming jobs for unskilled labor in India.
The growth of automotive industry and several other manufacturing industries had led a majority of players toward expansion of their manufacturing facilities.  State-of-the-art machineries, latest technology and automation in processes had been the major focus of all companies.  Indian auto industry is the 8th largest among the world countries and 5th largest exporters in Asian continent.  India's impeccable engineering foundation had added to its expertise in manufacturing small sized, fuel efficient and low priced cars/Sedans had attracted global auto brands.  India's auto component industry export had reached an estimated approximate USD 5 billion in worth and is expected to grow till an estimated USD 30 billion by the year 2020 thereby creating upcoming jobs for unskilled labor in India.
Premium car companies like Bentley, Audi, Chevrolet, BMW, Mercedes, Lamborghini, Volkswagen and Rolls Royce had set-up their manufacturing units in India.  The country's capability to offer several operational benefits to casting & component manufacturing industries has led those companies to consolidate their manufacturing operations as well as vendor base.  Recently, Ford had announced setting-up of a plant with an annual production capacity of more than 250,000 vehicles with an investment of around USD 500 million; this is an indicator of opportunities for unskilled labor in India.
India's cheap labor cost comes as a boon to the unskilled labor intensive foundry industry.  Companies could hire fresh engineering graduates from tier-1 or tier-2 institutes by shelling out as little as USD 6,000 or as little as USD 100 a month for a semi skilled and unskilled labor.  The tooling costs and the costs for dies are lower than most developed countries.  Hi-tech overseas players exploit the opportunity to collaborate with local manufacturers due to the leverage in the domestic and export markets.  By the end of 2014, casting industry capacity is expected to touch 15 million metric tons according to that industry association. 

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1 comment:

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