Some 60 years ago, teachers who set questions for “
English Language “ exam paper for 10th standard , were fond of selecting
following type of question for writing an Essay :
“ Write an autobiography of a Pencil ( or a Shirt or a Table …… ) “
Predictably that essay ( answer by students ) would start with :
“ I was born as a teak-wood sapling in the jungles of
Burma….. “ ( before they renamed Burma )
Students just loved this kind of a question since they
had mugged up the answer ( affectionately
called “ LBH = Learn By Heart “ in “ Solved
Question Papers “, published by Kutmutia )
I am not aware of the present-day preferences by exam
question paper setters and the students
But for some time now, product manufacturers in India are
being asked to write :
“ Autobiography of an Appliance
“
Let me explain
There is a demand from all and sundry, that Indian
product manufacturers should place a sticker / label, “ COUNTRY
of ORIGIN “ on each piece manufactured
/ sold
Hear this voice :
Extract :
Trader's body CAIT has urged Commerce and
Industry Minister Piyush Goyal to make it mandatory for every e-commerce portal
to mention 'country of
origin' on each product sold at their platforms, so
that buyers can make an informed decision.
Most e-commerce portals are selling Chinese
goods, about which the consumer remains unaware, said the Confederation of All
India Traders (CAIT), which has launched a campaign for boycott
of Chinese goods
=========================================================
To
me, this concept of “ Country
of Origin “ seems like a very nebulous matter ( not unlike CRAB nebula )
Now
, even in these days of “ Global Supply Chain “,
it is quite possible that the humble pencil’s “ Country of Origin “ remains Burma – all the way
from that piece of wood encasing a slender piece of black lead, to its printing
/ packing / dispatching
But
it gets very complicated to determine the “ Country of Origin “ of ( say ) a domestic
appliance such as a Fridge / Microwave Oven / Dish Washer etc., which has many
processes ( stages of Value Addition through inputting
of local manpower )
Question :
How
much “ Value Addition “ ( as a percentage of total cost of production or
selling price ) should take place in India, to qualify an appliance for “ Made in India “ tag ?
I
am unaware of any official / authentic definition
To
get a clear picture of how “ Value
Additions “ take place in a chain of countries , before an appliance
gets delivered to your home, consider the following ( over-simplification
) :
=======================================================
Value-Addition is a Many Splendored Thing – in today’s
Global Supply Chain
========================================================
|
PROCESS
STAGE
|
OUTPUT
(
at each stage of Process )
|
Country
supplying Inputs to Processing Country
|
PROCESSING
COUNTRY
(
where value addition takes place using local manpower )
|
INPUTS
at each Stage
(
Value Addition )
|
MANPOWER
COST as % of final total cost
(
Value Added )
|
|
|
|
|
|
|
|
|
1
|
Iron
Ore
|
|
India
|
Manpower
|
5 %
|
|
2
|
Ingots
|
India
|
Australia
|
Manpower
|
10
%
|
|
3
|
Bars
|
Australia
|
China
|
Manpower
|
10
%
|
|
4
|
Components
|
China
|
Indonesia
|
Manpower
|
10
%
|
|
5
|
Sub-Assy
|
Indonesia
|
Singapore
|
Manpower
|
25 %
|
|
6
|
Assembly
|
Singapore
|
South
Korea
|
Manpower
|
30
%
|
|
7
|
Packaging and Dispatch
|
South
Korea
|
India
|
Manpower
|
10 %
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
100
%
|
Obviously the scenario described above is an “ Over Simplification “ considering that , at each “
Stage of Processing “ ( in a given country ) , “ Inputs “ may come from many
other countries ( not just one country )
Since I was confused about the exact “ Methodology “
employed by our Government to declare :
Ø This
product is “ Made in India “ ( ie; “ Country of
Origin “ is India ) , and
Ø This
product is “ Made in China “,
-
some 2 years ago , I sent following blog / email to our Policy Makers
:
E
Commerce Definition : a Space Ship ? …………………………………[ 05 July 2018 ]
Extract :
And , as far as defining what is “ Made in India “ is concerned , I
believe , government goes by “ Percentage of Value Addition “ locally
But, this is a very difficult and time-consuming exercise
Even when possible, its result holds good for a very short
period in a dynamic situation
A manufactured “ local
product “ could have hundreds of components ( both, local and
imported )
And those “ local components “ could have “ imported “ raw
materials or intermediates
These days , a product could be,
* patented in one country ( concept )
* designed in another country
* developed ( detail manufacturing
drawings ) in another country
* components made all over the World
* Sub-Assemblies ( of those components ) carried out
in another country
* Final Assembly done in another country
* Packaging done in another country
* Offered for sale on ONLINE e-commerce portals in
another country
* Marketed by agencies located all over
the World
* Delivered using manpower / drones /
supply chains of several countries
* Financed by funds from all over the world ( Interest Costs )
At which “
Level “ of Value Addition , does a product become “ local “ ?
And if I download a " Product Drawings / Design " over
the internet and then " 3D Print " it in my garage ( using "
imported " resins ) , then is that a " local " product ?
=========================================================
And 4
years ago, I sent following blog / email to Cabinet Ministers :
Missing
the Woods for the Tree ? …………………………………………[ 12 Aug 2016 ]
Extract :
Entire
cycle of Designing / Manufacturing / Marketing / Selling / Order-taking / Delivering
/ After-sales Servicing /
Logistics / Collecting Payments /
etc , will get spread so thinly across Countries / Continents / Companies / Individuals,
that it will become next to impossible to,
Ø
keep
track of " WHO "
Ø
is
adding " WHAT " value to the process
Ø
and
" WHEN "
Ø
and
from " WHERE "
No one will be able to unravel this GORDIAN KNOT !
========================================================
Dear
Shri,
B
C Bhartiaji ………………………[ President – CAIT / president@cait.in ]
Praveen
Khandelwalji ……….[ Secretary General – CAIT / sec-gen@cait.in
]
There
are news reports that this “ Country of Origin / Made in India “ draft policy
will soon be put in public domain for comments
I
hope my comments above, helps you in framing CAIT comments
With
regards,
Hemen
Parekh
hcp@RecruitGuru.com / 23 June 2020
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