The Hindu : EU offers big scope for sub-contracting

Online edition of India's National Newspaper
Tuesday, Mar 09, 2004

Business

Business

EU offers big scope for sub-contracting

By Our Special Correspondent

NEW DELHI, MARCH 8. Even as the controversy over outsourcing is growing, India today described sub-contracting as the "cornerstone'' of the industrial and manufacturing sector which is being effectively used and implemented by engineering giants all over the world. It said sub-contracting ensures a competitive edge allowing the primary industry to grow rapidly in a healthier environment.

Addressing a Euro-India business meeting organised by the Engineering and Export Promotion Council (EEPC), the Special Secretary, Commerce Ministry, S. N. Menon, said such sentiment should be encouraged and replicated in other growth sectors and services such as IT, banking and accounting for ensuring competitiveness.

He said the sub-contracting market segment in EU accounted for over $400 billion and 15 per cent of its output. The major items featuring in the India-European Union industrial sub-contracting partnership included the automotive sector, aeronautics, railways, agricultural and excavation equipment as well as electrical, mechanical and engineering goods. These sectors were critical inputs for industrial expansion, he pointed out and competitiveness in these critical areas would have a positive effect on industrial activities.

In this context, he noted that Indian sub-contracting and sub-assembly industry had developed considerable expertise in respect of foundry, forging, precision machined components, sheet metal parts and other engineering ancillary products. Global majors in auto and other industrial engineering sectors had a long standing mutually beneficial partnership with the Indian subcontracting industry.

"We understand that the sub-contracting market segment in EU accounts for over $400 billion spread across three lakh European sub-contractors employing 7.2 million workers,'' he said.

In order to match the growing requirements of the EU sub-contracting industry and the strengths of their Indian counterparts, he said the EEPC was being given support to organise mutually beneficial interactions between the two sides.

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