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Rising inflation - a nightmare for Indian industry
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Bikky Khosla | 10 Jun, 2008
For a brief period, it seemed that the woes of the Indian industry in general and the exporters in particular were over as the rupee depreciated against the dollar providing some respite.
However, that was not to be. Rising inflation has raised its ugly head and input costs have risen, even as against this backdrop, the industry now is being haunted by stiff competition from nations like China, Vietnam, Combodia and Sri Lanka.
With soaring fuel prices, high raw material price, greater labour costs, etc, India is fast losing its cost advantage in the global markets. And with greater cost of production, the industry is on the horns of dilemma - whether to pass on the burden to the end user or to absorb the cost by lowering the profit margins.
Manufacturers are going through a tough time, and with no way out, will ultimately have to hike prices to partly cover the higher costs.
I feel in this situation, both manufacturers and exporters must pay attention to the rising cost of labour and other production factors. The industry needs to take some tough decisions now.
Production needs to be slimmer and nimbler to ensure that productivity and capital efficiency is maintained. Cutting down on the cost of production seems to be the only way to beat the vagaries of the current market situation. Innovative designs based on the pulse of the customers and strengthening the supply chain are some other steps that need to be incorporated.
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Rising inflation - a nightmare for Indian industry
Kailash Chander Vashist | Tue Jun 17 04:07:07 2008
Yes, it's definitely tough time particularly for the Indian manufacturers and exporters. Here, we'd like to add that when Reliance started it's retail business, the company demanded or expected 40% margin on MRP (what we heard, rumour in the market) while HUL/ Unilever gives only 5-6% margin to it's distributors and maximum 10% margin to the retailers so in total margin on MRP can be counted only 15%(average).
Now Reliance is such a powerful and big buyer that no company can ignore or avoid her so definitely companies like Unilever will increase the MRP to adjust all this situation.
This is just an example,we can certainly understand the result of the entry of organised sector/big business houses/ industrial groups who cannot be satisfied selling goods only at 15% margin or less than 10% like small shopkeepers.
Rising inflation - a nightmare for Indian industry
Sanjeev Bhatia | Mon Jun 16 07:54:03 2008
No doubt, today, common man hods the key of industrialisation at SEZs. Unfortunately, even after 60 years of Independence for which poor peasants also paid very high price, are kept out of main stream of this great society. Today, it is shameful to purchase their land by hook or by crook.
Agriculture is also a kind of food industry and these poor peasants are not only saving our foreign exchange by producing crops but also preserving most valuable agricultural land in the country.
This is to be remembered that agricultural land can be used for industrial use any time but industrial land can not be used easily for agriculture.
So, it is my personal opinion that a High Power Committee, under the supervision of Prime Minister of India, should be constituted and actual rate of their invaluable land be fixed (keeping in view the sudden rise in price when it is changed from agricultural land to industrial land) and they should be
compensated as agreed to them also.
Inflation/Export
Adrian Akau | Wed Jun 11 22:08:38 2008
Rising inflation is due greatly to rising energy costs. Effective exporting means to have a product of high value and high demand. Specific items must be prepared for targeted markets abroad.
Inflation is affecting the entire global economy and some previous markets are bound to decline or to disappear. Value packed means that the items can and will be sold for a profit even under inflationary circumstances. Doing so will prevent excessive losses or bankruptcy.
adrianakau2aol.com
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Re: Inflation/Export
KEITH STEPHENS | Thu Jun 12 04:26:23 2008
12-6-08
The price of Australian wool is going down. Australia would welcome having India either buy more Australian wool or even India own a wool processing /Factory in Australia. wE NEED MORE OVERSEAS BUYERS OF aUSTRALIAN WOOL
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Your editorial as above
R Ramamurthy, Chief Executive, Paraflat Machines Manufacturers | Wed Jun 11 11:21:12 2008
Gentlemen, 11.06.2008
We are in for some very hard times both in domestic and export. As far as my memory goes right back in 1982, my acquaintance with a very learned Mechanical Engineer, a South Indian settled in West Germany, a pioneer in designing new concepts, remarked that in India, it is time the enterpreneurs in India switch over to specialization. It was more of "Jack of all trades". As you have mentioned - Innovation is the key word. We must expand our knowledge base to make products with more of unique features that will help our export and domestic market. Customers/End users worldwide are eager to accept new concepts. This is one way of beating the inflation and keep products that will be ever in demand.
The other point is flexibility to quote in different currencies, switching over from Dollar to Euro, etc. This we had done and to an extent were successful.
Exporters should bring this into their gamut of negotiations mainly.
This is my opinion.
Warm regards.
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Re: Your editorial as above
Rodolfo Velazquez | Wed Jun 11 12:23:01 2008
Dear Gentlemen.
We from the other side of sea have been experienced very good results with the equipment and technologies from India. The only one problem we see is that still India is not very well convinced to export and pay good attention to customers from other countries far from Asia. When India pay such strong attention to countries from America/Europe, then can be more competitive and ugly times can be converted in opportunities. Frankly speaking few countries from abroad has the human, technican and skill resources that India has. So exports is the key and look the world.
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Re: Your editorial as above
GANAPATHY | Wed Jun 11 13:59:37 2008
DEAR BIKKY
THE ALL MESS HAS BEEN CREATED BY THE GOVERNMENT UNDER THE P.M. WHO HAS BEEN GUIDED BY A ITALIAN LADY WITHOUT ANY EXPOSURE TO INDIAN CULTURE AND ECONOMY. THE ONLY QUALIFICATION SHE HAD WAS ACCIDENTLY SHE BECOME WIFE OF OUR EX-PRIME MINISTER.
THE INFLATION IS UNIVERSAL IS ACCEPTED. BUT IN THIS COUNTRY GOVERNMENT RULED WITH THE SUPPORT OF COMMUNIST FROM OUTSIDE CANNOT HAVE ALTERNATIVE.
OUR ONE OF THE STATE GUJARAT LEAD MY SHRI.NARENDRA MODI HAS TO BE CONSIDERED AS A MODEL FOR RULING THE COUNTRY WITH THE AVAIALBLE ECONOMICAL RESOURCES [THERE IS NO INCOME FROM ALCOHOL] AS OTHER STATES HAVE AT THEIR DISPOSAL.
THE AGRICULTURE MINISTER IS MORE INTERESTED IN AMASSING WEALTH BYORGANISING CRICKET MATCHES.
HRD MINISTER IS BUSY IN MAKING RESERVATIONS FOR CREATION OF VOTE BANK.
FINANACE MINISTER IS INTERESTED IN DECLARING WAIVING OF LOANS FOR FARMERS TO THE TUNE OF 70000 CRORES, WITHOUT ANY CONCRETE PROPOSALS TO GENERATE THE REVENUE.
IT IS A KNOWN FACTOR THAT MOST OF THE BENEFICIERY OF ABOVE LOAN IS FROM MAHARASHTRA HAVING POLITICIANS UNDER THE GARB OF FARMER TAKEN LOAN AND LOOKING FOR AMNESTY.
THE LIST MAY BE ENDLESS.
WITH ABOVE FACTORS, NO BUSINESSMAN OR INDUSTRIALIST WOULD LIKE TO TAKE ANY RISK AND LOOK FOR UPGRADATION OR EXPANSION.
ONLY THE BENEFICIARY OF THIS GOVERNMENT IS AMBANI FAMILY.
FATHER WAS PATRONISED BY FINANCE MINISTER OF AT THE TIME MR.PRANAB MUKARJEE UNDER THE LEADERSHIP OF EX.PM.SMT INDIRA GANDHI.
SON BY SMT.SONIA GANDHI.
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Re: Your editorial as above
Save K | Wed Jun 11 14:48:10 2008
Mr.Rammurthy may be right partially,ut the main evil of all problems is government's mismanagement of the entire economy and very wrong policies particularly in spending money.Subsidies,loan wavers,expences on every MP and MLA/MLC lead to non productive use of the wealth available.Government being the largest holder and spender of the country's finances have to ensure that these finances are utilised productively and for generation of more wealth.Delays in projects implementations, delays in sanctioning projects are taking away the benefits of each of these projects.
If you seriously look at what is happening in this country, our government is mainly responsible for this situation.When big houses employ highly educated and knowlegiable people to manage their wealth, we must have such people in Finance Ministry who new their jobs well.
We cannot run the economy and this country with lots of money spent on non productive activities.While some lucky farmers may be happy and smiling, but majority of Indians are unhappy and will simply punish this government and ministers in next general election due to their callous attitude towards the whole situation and lack of courage and direction to take some bold steps to improve the situation.
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Re: Re: Your editorial as above
Peter Vasic Australia | Thu Jun 12 00:22:54 2008
Dear Sirs,
May I way in with a simple perspective, I do not possess any degrees in economics, so my perspective is that of a simple layman. I have always had immense respect and an enormous affection for the country of India, its amazing cultures and history. The main perspective I find is that India with its new found industrial and economic might, still maintains a lot of its strength based on lower cost labour. Your biggest concern must be china, who I see as the biggest imitators in the world, Millions of ants copying whatever is made somewhere else. I truly believe India must step out of the shadow of Europe and the USA. Utilize the enormous pool of educated talent that you are now ammassing ( we have many Indiand being educated in Australian Universities as well) and begin to produce products that are unique, innovative and at the forefront of technology. Become the next Europe/ USA ( perhaps not in the religious sense) but in the economic sense. Out German the Germans with Quality and precision, out innovate the Yanks with Marketing and new ideas , Show the Japanese how to produce the best. Lead the world in new generation hi tech energy efficient automobiles. Show the planet how to maintain sustainable pollution free technologies, push innovations in solar power, Hydrogen technologies etc. The world needs new leaders and I believe a massive economy and population like india with the right incentives can deliver to the world what no other nation can.
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Re: Re: Re: Your editorial as above
Alex Qiu | Thu Jun 19 01:01:33 2008
The inflation is every world now due to oil price and energy prices. The only I think is to upgrade products grade for value added products, price competition is not the only way. Alex Qiu(yitongfood@gmaill.com)
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