CHASING LOCALISATION

THE CHASE TO LOCALISE IS A GLOBAL PHENOMENON. ASHISH BHATIA GAUGES THE PURSUIT FOR AN EDGE.

- ASHISH BHATIA

It has been over four years since the COVID-19 pandemic caused significant changes in shopfloors and manufacturing processes. As a result of supply-chain bottlenecks, concepts such as ‘Just-In-Case’ have been adopted instead of the ‘Just-In-Time’ approach from the previous benchmark. Manufacturers have invested in automation to increase production volumes without compromising quality and to reduce dependencies. Decentralisation of procurement hubs and building a diverse vendor base with the plus one strategy has been a priority. Due to increasing protectionism, some manufacturers are reconsidering localisation levels in the age of contractual manufacturing and outsourcing.

TIER SUPPLIERS GLOBALLY

India is banking on the PLI scheme for Advanced Automotive Technology (AAT), with a budgetary outlay of Rs. 25,938 crore for five years (FY2022-23 to FY2026-27). This is expected to enable the creation of domestic as well as global supply chains. The National Programme on Advanced Chemistry Cell (ACC) Battery storage was approved by the Union Cabinet on 12.05.2021 and is known to have a budgetary outlay of Rs. 18,100 crore. It is expected to strengthen the ecosystem for electric mobility and battery storage in the country. The scheme envisages enhancing India’s manufacturing capabilities of ACC by setting up of Giga scale ACC and battery manufacturing facilities in India with emphasis on maximum domestic value addition to promoting the ‘Make in India’ initiative.

In April, Luman Auto’s new Pantnagar plant in friction product manufacturing like brake pads and brake liners is claimed to be a validated facility sourced from global globally respected suppliers.