Many entrepreneurs evaluate this question on a daily basis. Whether to brings goods & machinery from China and sell them in India or manufacture the goods & machinery in India itself? However, as things stand today, the answer to this question tilts in favor of procuring goods & machinery from China and then sell them in India. This has become standard practice. A practice that continues to grow with every passing year. These goods & machinery are simple goods & machinery. Not something very sophisticated that can't be manufactured in India.
So, what explains this trend of procuring goods & machinery from China and then selling them in India? There are 2 principal reasons for it.
Therefore, let us understand what is bottom-up manufacturing first?
Bottom-up manufacturing is an approach wherein a product or machinery idea originates in an entrepreneur's mind and he/she decides to manufacture it. A large company (top-down manufacturing) won't be manufacturing these simple goods & machinery because of the volume constraints. Goods such as toys, souvenirs, electrical items such as Diwali Lights, exhaust fan, ceiling fan, switches, MCBs, and electronic items won't be manufactured by large companies. Machinery such as the one shown below that's used in construction activities won't be produced by large companies because of the volume constraints. Therefore, SMEs or small entrepreneurs alone can produce these goods and machinery in India. However, they don't manufacture these goods and machinery in India. Why? Because our manufacturing policies, as well as Make in India program, have failed to focus on bottom-up manufacturing resulting in a massive trade deficit with China.
Let us take the case of this simple machinery. This machinery is used in Flooring works. This machine is known as 'Ride-on Trowel' machine or simply ROT. The machine is used to trowel the floor. The machine is mostly used to trowel industrial floors.
Now, this machine is mostly imported from European countries such as Italy or from China. Now, the question that needs to be asked is 'why can't this machine be manufactured in India'? Why are our machinery manufacturers not manufacturing this machine in India? Again, a large manufacturer won't be manufacturing this machine in India because of volume constraints. Unless and until a product or machinery generates large volumes, a large manufacturer (top-down manufacturing) won't manufacture that product or machinery in India. Therefore, only a small-scale entrepreneur (bottom-up manufacturing) can manufacture these goods & machinery.
However, a small-scale entrepreneur does not manufacture these kinds of goods & machinery in India because of the following reasons:
However, all these above-mentioned reasons are consequences of the lack of understanding among our policymakers to differentiate between top-down manufacturing and bottom-up manufacturing. If policymakers, as well as Make in India program, focuses on bottom-up manufacturing, then, it is inevitable that the above-mentioned reasons will be sorted out resulting in the promotion of bottom-up manufacturing in India. That would definitely be a big boost to the Indian economy. Not only will this focus on bottom-up manufacturing result in reducing the trade deficit with China but it also will result in generating millions of manufacturing jobs in India.
Are our policymakers listening?
So, what explains this trend of procuring goods & machinery from China and then selling them in India? There are 2 principal reasons for it.
- A lack of understanding among our policymakers to differentiate between top-down manufacturing and bottom-up manufacturing.
- Because of this lack of understanding to differentiate between top-down manufacturing and bottom-up manufacturing, bottom-up manufacturing continues to suffer in India. And therefore, there is no policy framework to support bottom-up manufacturing in India.
Therefore, let us understand what is bottom-up manufacturing first?
Bottom-up manufacturing is an approach wherein a product or machinery idea originates in an entrepreneur's mind and he/she decides to manufacture it. A large company (top-down manufacturing) won't be manufacturing these simple goods & machinery because of the volume constraints. Goods such as toys, souvenirs, electrical items such as Diwali Lights, exhaust fan, ceiling fan, switches, MCBs, and electronic items won't be manufactured by large companies. Machinery such as the one shown below that's used in construction activities won't be produced by large companies because of the volume constraints. Therefore, SMEs or small entrepreneurs alone can produce these goods and machinery in India. However, they don't manufacture these goods and machinery in India. Why? Because our manufacturing policies, as well as Make in India program, have failed to focus on bottom-up manufacturing resulting in a massive trade deficit with China.
Let us take the case of this simple machinery. This machinery is used in Flooring works. This machine is known as 'Ride-on Trowel' machine or simply ROT. The machine is used to trowel the floor. The machine is mostly used to trowel industrial floors.
Now, this machine is mostly imported from European countries such as Italy or from China. Now, the question that needs to be asked is 'why can't this machine be manufactured in India'? Why are our machinery manufacturers not manufacturing this machine in India? Again, a large manufacturer won't be manufacturing this machine in India because of volume constraints. Unless and until a product or machinery generates large volumes, a large manufacturer (top-down manufacturing) won't manufacture that product or machinery in India. Therefore, only a small-scale entrepreneur (bottom-up manufacturing) can manufacture these goods & machinery.
However, a small-scale entrepreneur does not manufacture these kinds of goods & machinery in India because of the following reasons:
- a lack of access to modern manufacturing technologies
- a lack of access to low-cost financing
- a lack of access to the single-window system to obtain approvals
- a lack of access to a trained workforce
However, all these above-mentioned reasons are consequences of the lack of understanding among our policymakers to differentiate between top-down manufacturing and bottom-up manufacturing. If policymakers, as well as Make in India program, focuses on bottom-up manufacturing, then, it is inevitable that the above-mentioned reasons will be sorted out resulting in the promotion of bottom-up manufacturing in India. That would definitely be a big boost to the Indian economy. Not only will this focus on bottom-up manufacturing result in reducing the trade deficit with China but it also will result in generating millions of manufacturing jobs in India.
Are our policymakers listening?
