“In a market without adequate volumes, why should companies enter the automation manufacturing domain?”

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While the rest of the world is poised at the threshold of Industry 4.0, India faces many challenges when it comes to automated manufacturing. In a candid conversation with Purba Das, senior business journalist and Paromik Chakraborty, technical journalist of EFY Group, Raj Singh Rathee, MD, KUKA Robotics (India) Private Limited, talks about the hardships faced by automation manufacturers in India.

EB: Does it make sense for automation players to enter the Indian market today?
The market is not big enough. It does not make sense for a company to manufacture robots in India till the market grows. Therefore, most of the local requirement for robots is met by Indian subsidiaries importing the robots from their foreign headquarters and supplying them to the market.
To be honest, given the current demand, even having a good share of the market is not enough for a robotics company to survive in India. Our market share in India is currently about 20 per cent. You can understand that, in a national market of 3,000 robots, even if our market share increases up to 25 per cent, it won’t have a big impact on our business. In such a market, which does not have the right volumes, why should companies manufacture robots?

EB: So when do you expect the market to pick up?
I honestly do not know. When we started off in 2006, we had expected the Indian market to pick up five years down the line, but things did not turn out as anticipated. You see, China and India started off with robotics around the same time —almost 10 years back. China had a small market of 3,000 robots a year, while demand in India amounted to about 1,500 units. Today, China is the biggest market for robotics and automated applications with a market of around 70,000 robots a year, whereas the Indian market has only grown to a size of 3,000 robots today. You can clearly tell the difference in the progress made by the two countries by those figures.
The companies in China invested a lot in automation. They greatly upped their production levels and opened up to newer technologies. Their government helped them a lot, too. Unfortunately, in India, there are no incentives for companies that go into the field of automation. Moreover, since Indian companies primarily import their products, this affects the end customer as well, in terms of the cost. Considering all these factors, it is really difficult to predict any growth for the Indian market at this moment, with respect to automation products.

EB: But what, according to you, is the reason behind the market not picking up?
There are a lot of challenges. The biggest is the lack of awareness among customers. The big OEMs are aware of the latest technology due to their foreign exposure and, in the process, transfer the expertise to their Indian subsidiaries or counterparts. But in the case of the SMEs, most owners are unaware of the latest in robotics, and they do not have foreign counterparts to gather any knowledge from; hence, they do not know how automation can help their manufacturing processes. The biggest challenge is to reach out to them and tell them about the USPs and benefits of automation technologies that will improve their business.
The scarcity of trained or skilled resources to handle automated equipment is another major challenge in India.
In addition, there needs to be greater R&D in India. The mindset of selecting only tried and tested products is hindering innovation. Local R&D has to increase to overcome this problem.
Finally, the lack of efficient administrative policies is also a big obstacle for companies. For example, the Ministry of Corporate Affairs has introduced a new round of audits for companies to undergo compulsorily, in addition to following the existing rules. The aim was to improve the ease of doing business. But in reality, this has increased the length of the manufacturing process and bestowed an additional cost on the companies.

EB: Could you elaborate on this?
For instance, an initiative was taken by the government to consolidate a company’s excise reports that were originally prepared separately. While this would have been helpful, the government later asked for the consolidated report to be split. Now, companies like us have to file two separate returns – one as a trader and another as an importer, even if the returns are the same or even zero. This has added another layer of complexity in the system.
So, somehow, despite the intention of making business easier, the new initiatives are adding layers of complexities for companies. Presently, there is only a juggling of new terms going on all around, while the policies implemented are thwarting the growth of the industry.

EB: Do you see ‘Make in India’ doing any good for your industry?
From the end user perspective, ‘Make in India’ should help us. If Indian manufacturers truly develop and design their products in India for both exports as well as for domestic consumption, they would have to incorporate automation because manually producing and delivering such high volumes is not feasible. But somehow, we have not seen any major push in this direction, in these two years. We have not seen new companies come up to start this initiative either.
To be honest, the infrastructure and the extent of support provided by the government is not yet strong enough. The ‘Make in India’ drive in 2015 aimed to improve the ease of doing business for Indian enterprises. Unfortunately, not much has changed yet.

EB: Globally, what is new in automation? Where is the world heading to?
The world is moving towards Industry 4.0 globally. This is the process of building a smart factory where the constituents of a company’s shop floor, including the devices, components, the robots and the workspace are all integrated and connected. As a result, the manager of the shop floor can see what parts are available at any point in time, how many parts are being made or used, what is the rate of rejection as well as the reasons behind this, and so on. And all of this can be accessed on a smartphone or laptop in real-time. In the case of a factory breakdown, artificial intelligence can inform where the breakdown occurred, in which machine it happened, which component failed and how it can be replaced.
Globally, people are working on Industry 4.0 right now and there are a few products in this space out there. However, Industry 4.0 is not 100 per cent developed, as yet. It will take some time to be completely realised. In the coming years, we will see a growing number of companies benefit from Industry 4.0. Unfortunately, India is not even at the Industry 2.0 level yet – let alone Industry 4.0. Large automotive manufacturing companies here are using high-level automation at a substantial rate. However, the smaller companies, which account for most of India’s manufacturing strength, are using very low-level automation or none at all.

EB: So, how are you, as one of the major players in the Indian market, promoting automation?
Frankly, customer awareness is not in our hands. We are doing our bit to promote our products and also to raise awareness about how robotics and automation will help businesses. You see, most Indian customers are not ready to invest in even a small and simple robot, which is not very expensive.
The cost of a better machine that has more advanced levels of automation is bound to increase. Better products and better technology will translate into a higher price. Unfortunately, the Indian customer is not ready to pay more, even for a better product.

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