EXPORTS MAY TAKE A BIG HIT

One of India’s biggest assets is always considered to be its demographics — especially its employable youth — as the rest of the world, including China, ages. But automation and robotics could dent the country’s advantage and affect its Make-In-India programme, which seeks to attract foreign companies through its low labour cost, talent pool and huge domestic market.

While all companies may not shift to automation immediately, exporters and companies, exposed to foreign competition in India would have to introduce automation and robotics to stay competitive in the global market.

With exports contributing 20 to 25 per cent of India’s economy, automation and robotics would slow down job creation in a big chunk of business activity. Agricultural activity has already started shifting to mechanisation due to higher rural wages, leading to the creation of new service of renting out and maintaining agricultural equipment to those who can’t afford to own them. This has rendered the unskilled or low-skilled workers jobless.

Several automakers have to shifted some of their processes to automation and robotics. The deciding factor for the survival of a job would be labour cost and requirement of precision.

As labour cost in India is still low, Mr Ajay Kolla, founder & CEO, Wisdom Jobs, claims that the threat is exaggerated. “Labour costs in India are still much lower than the capital cost of introducing automation and robotics, unlike in the US where the costs are more or less at par. Therefore automation across the board is still a long way off in India. That said, industries that are technologyfocused such as IT and BFSI (banking, financial services and insurance), have been early movers, and are in the process of piloting hybrid models,” he said.

Another issue that stems out of this is how Indian exporters retain their customers, as their competitors from developed countries, with access of cheaper credit and automation, bring down prices.

This scenario, experts believe, requires urgent attention of the government to make Indian exporters competition-ready before automation hits exports.

Low-cost products manufactured by companies in developed countries could also threaten Indian companies, if the country has free trade agreement with them. With most countries under the World Trade Organisation, companies in the rich countries could swamp poor countries with their products, killing local industry and rendering their employees jobless

LOW-COST PRODUCTS MANUFACTURED BY COMPANIES USING ROBOTS IN DEVELOPED COUNTRIES COULD THREATEN INDIAN COMPANIES, IF INDIA HAS A FREE TRADE AGREEMENT WITH THEM.