Technology Issues in India’s Machine Tool Sector

The technological state of the machine-tools industry in India is a product of the government policies permitting import of technology and its absorption and assimilation, the degree of competition in the industry and the absence of pressures from a demanding user industry to modernize and manufacture sophisticated products. The Indian machine-tools sector can be said to be lagging behind technologically as compared to other developing countries. Modernization of other sectors of the economy has not been followed by a similar development of the machine-tools sector. The initial dominance of HMT in the machine-tools sector has now given way to the rise of a number of smaller technologically enter prising firms. Apart from being non-competitive in terms of cost, Indian machine-tools are found to be deficient in the matter of marketing and after sales service. The reasons for the present state of technological backwardness seem to be the policies of the 1960'sand 1970's which favoured a limited number of manufacturers producing machines based on outdated technology for an assured market which had not acquired the capacity to discriminate on the basis of quality and price.

The industry also has been spending a much smaller part of its total investment on research and development. The slow pace of development of micro-electronics and the absence of a cost-effective ancillary industry network have contributed to the machine-tools industry not being able to achieve international competitiveness.