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CONTENTS Page No.

List of Tables

List of Figures

List of Annexures

Executive Summary i-iii

Chapter 1 Introduction 1

1.1. Background 1-2

1.2. Objectives of the Study 2

1.3 Terms of Reference 3

1.4 Methodology 3-7

1.5 Limitations 7

Chapter 2 Review of Utensils, Cutlery and Glassware sector 8-9

2.1 Utensils Sector 8-9

2.2. Cutlery Sector 10-12

2.3 Glassware Sector 12-14

2.4 Major Manufacturing Clusters of Utensils, Cutlery, Kitchen tools and Glassware Products in India 14-17

Chapter 3 Productivity of Utensils, Cutlery and Glassware Sector 18

3.1 Introduction 18

3.2 Key Performance Indicators (KPIs) of the Registered Factory Sector 18-21

3.3 Estimation of Productivity 21-30

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3.4 Conclusion 30

Chapter 4 Export Competitiveness of Utensils, Cutlery and Glassware Sector 31

4.1 Introduction 31

4.2 Export Performance 31-36

4.3 Comparison of World Exports from India, China and Korea 36-44

4.4 Competitiveness Analysis 44-45

4.5. Conclusion 47

Chapter 5 Field Survey Findings 48

5.1 Profile of Utensils, Cutlery and Glassware Manufacturing Units 48-50

5.2 Employment Profile 50

5.3 Trade Related Information 51-52

5.4 Domestic market Related Information 53

5.5 Factors responsible for competitiveness 54-55

5.6 Impact of Global Financial Crisis 56

5.7 Major Findings from Field Survey 57

Chapter 6 Summary of Diagnostic Case Studies 58

6.1 Introduction 58

6.2 Summary of Industry requirements: Utensils and Cutlery Sector 58-60

6.3 Summary of industry requirements: Glassware Sector 61

Chapter 7 SWOT Analysis of Utensils, Cutlery and Glassware Sector 62

7.1 SWOT Analysis of Cutlery Sector 62-64

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7.2 SWOT Analysis of Utensils Sector 65-66

7.3 SWOT Analysis of Glassware Sector 67-68

Chapter 8 Harmful Aspects of Non-Stick Cookware 69

8.1 Introduction 69

8.2 Non stick Cookware Products 69

8.3 Harmful Effects of Non-Stick Coatings 70

8.4 Stick with Nonstick 71

8.5 Alternatives to Nonstick Cookware Technology 71-72

Chapter 9 Impact Of Globalization On Utensils, Cutlery And Glassware Sector 73

9.1 Background 73-74

9.2 Agreement on South Asia Free Trade Area (SAFTA) 74-76

9.3 INDIA-ASEAN Free Trade Agreement 77-78

9.4 Impact of Free Trade Agreements on Utensils, Cutlery and Glassware Sector 78

Chapter 10 Summary & Recommendations 79

10.1 Introduction 79

10.2 Summary of findings 79-81

10.3 Recommendations 81-90

10.4 Cluster Development 90-91

References 92

Annexure 93-129

Study Team 130

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LIST OF TABLES Page No.

2.1 Major Utensils/ Cutlery, Kitchen Tools and Glassware Manufacturing Centers & Product categories 14-16

3.1 Characteristics of Utensils Manufacturing sector- Registered Factory Sector 19

3.2 Characteristics of Cutlery manufacturing sector: Registered Factory Sector 20

3.3 Characteristics of Glassware manufacturing sector: Registered Factory Sector 21

3.4 Partial Productivity Estimates for Labour and Capital inputs 22

3.5 Growth of Labour, Capital and Total Factor Productivity (%) 23

3.6 Index of Labour, Capital and Total factor productivity Growth 24



3.9 Index of Labour, Capital and Total Factor Productivity Growth Rates 27




4.1 Status of Exports of Utensils 32

4.2 Status of Imports of Utensils 32

4.3 Status of Exports of Cutlery 33

4.4 Status of Imports of Cutlery 34

4.5 Net Exports of Cutlery 34

4.6 Status of Exports of Glassware 35

4.7 Status of Imports of Glassware 36

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4.8 Exports of India, China and Korea to the Rest of the world (RoW) ITC codes: Utensils - Product group: 697 - Household equipment of base metal, n.e.s.

37

4.9 Imports of India, China and Korea from the Rest of the World (RoW) ITC codes: Utensils - Product group: 697 - Household equipment of base metal

38

4.10 Net Exports of India, China and Korea to the Rest of the World (RoW) ITC codes: Utensils - Product group: 697 - Household equipment of base metal

38

4.11 Exports of India, China and Korea to the Rest of the World (RoW) ITC codes: Cutlery: Product group: 696 39

4.12 Imports of India, China and Korea from the Rest of the World (RoW) ITC codes: Cutlery: Product group: 696 40

4.13 Net Exports of India, China and Korea to the Rest of the World (RoW) ITC codes: Cutlery: Product group: 696 41

4.14 Exports of India, China and Korea to the Rest of the world (RoW) ITC codes: Glassware: Product group 665 42

4.15 Imports of India, China and Korea from the Rest of the world (RoW) ITC codes: Glassware Product group 665 43

4.16 Net Exports of India, China and Korea to the Rest of the World (RoW) ITC codes: Glassware Product group 665 43

4.17 Growth in Net Exports of India, China and Korea to the Rest of the World. ITC codes: Glassware Product group 665 44

4.18 Exports and Imports of Utensils between India and China/Korea 45

4.19 Exports and Imports of Cutlery between India and China/Korea 46

4.20 Exports and Imports of Glassware between India and China/Korea 46

5.1 Distribution of Utensils, Cutlery and Glassware Products Manufacturing Units 49

5.2 Percentage of Exports to Total sales 51

5.3 Growth in Export during the last Ten Years 51

5.4 Extent of Increase in Exports during last Ten Years 52

5.5 Level of Import of Raw Materials for Unit’s Production Requirement 52

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5.6 Domestic Market Share 53

5.7 Share of Domestic Sales to Total Sales 53

5.8 Extent of competition in the Domestic Market from Local Companies 53

5.9 Quality of Basic Infrastructure in India 54

5.10 Quality of Basic Infrastructure in Competing Counties 54

5.11 Government’s Interface with the Business Sector 55

5.12 Clearance time to start a Manufacturing Unit in India 55

5.13 Clearance time to start a Manufacturing Unit in Competing Country 55

9.1 India’s Revised Offer List for ASEAN under AI-FTA dated 7th Feb 2008 77

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LIST OF FIGURES Page

No. 3.1 Index of Labour and Capital Productivity Growth 24



4.1 Status of Exports of Utensil 32

4.2 Status of Imports of Utensil 32

4.3 Status of Exports of Cutlery 33

4.4 Status of Imports of Cutlery 34

4.5 Net Exports of Cutlery 34

4.6 Status of Exports of Glassware 35

4.7 Status of Imports of Glassware 36

4.8 Exports of India, China and Korea to the Rest of the world (RoW) ITC codes: Utensils - Product group: 697 - Household Equipment of Base Metal

37

4.9 Imports of India, China and Korea from the Rest of the World (RoW) ITC codes: Utensils - Product group: 697 - Household Equipment of Base Metal

38

4.10 Net Exports of India, China and Korea to the Rest of the World (RoW) ITC codes: Utensils - Product group: 697 - Household Equipment of Base Metal

39

4.11 Exports of India, China and Korea to the Rest of the World (RoW) ITC codes: Cutlery: Product Group: 696 39

4.12 Imports of India, China and Korea from the Rest of the World (RoW) ITC codes: Cutlery: Product Group: 696 40

4.13 Net Exports of India, China and Korea to the Rest of the World (RoW) ITC codes: Cutlery: Product Group: 696 41

4.14 Exports of India, China and Korea to the Rest of the World (RoW) Glassware: Product Group 665 42

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4.15 Imports of India, China and Korea from the Rest of the world (RoW) Glassware Product Group 665 43

4.16 Net Exports of India, China and Korea to the Rest of the World (RoW) Glassware Product Group 665 43

4.17 Growth in Net Exports of India, China and Korea to the Rest of the World. 44

5.1 Distribution of Sample Utensils, Cutlery & Kitchen Tools and Glassware Products Manufacturing Units – NPC Field Survey 49

5.2 Average Employment per Unit 50

5.3 Engagement in Exports 51

5.4 Engagement in Imports 52

5.5 Infrastructure in the State 54

5.6 Effect of Global Financial Crisis on the firm 56

5.7 Expectation of a fall in Domestic Business and Export in the coming Years 56

5.8 Strategy to counter Global Financial Crisis 56

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ANNEXURES

1 Field Survey Questionnaire: Company/Manufacturing Unit 93-100

2 List of Units Contacted For Field Survey and Case Studies 101-106

3 Methodology Adopted for Partial and Total Factor Productivity Estimations 107-110

4 Format for developing Diagnostic Case Studies 111

5 Views of Industry Associations to make the Sector Productive and Competitive 112-124

6 Minutes of Round Table Conference 125-129

Final Report Productivity & Competitiveness of Utensils, Cutlery and Glassware Sector

National Productivity Council i

EXECUTIVE SUMMARY

Most of the units in Utensils, Cutlery and Glassware sector are located in various clusters

across the country. Since the units are very small, they were growing in clusters in India for

centuries and experienced significant benefits as a result of clusterisation. The collective

strength of clusters enable its members to get raw materials on better terms, availability of

finances for setting up units, obtaining government subsidies, updating technology of

production, identification of markets, transportation, storage and marketing. But it has been

observed during the course of this study that still a lot needs to be done for the development of

the existing clusters. New clusters also need to be established in this sector through Cluster

development programmes, provision of Common facilities Centre, Research and Development

Initiatives and facilities being provided to them such as lower Interest rates for technology

enhancement and automation.

One of the important outcomes of the study has been that since most of the units in the sector

are based on manual operations and are highly labour intensive, it has the capacity and

potential to provide labour and provide employment to many needy persons throughout the

length and breadth of the country. Majority of persons employed are unskilled labour and

there is an overriding necessity to work towards upgradation of their skills by vocational

training and skill development programmes etc.. Another drawback of the sector is that there

are lot of bureaucratic bottlenecks and hurdles at lower and intermediate levels. There is a

great deal of corruption which stands in the way of increasing productivity and achieving

greater performance in this sector. One of the major causes of concern is the non-availability

of rerolled steel (patta patti) which is at present under monopolistic control and the

government and its agencies like the Steel Authority of India should provide urgent relief to

all the manufacturing units in this sector. There are lots of unnecessary taxes and duties

imposed by local authorities and state governments which need to be restructured and

rationalized so that the burden on the manufacturer in this sector is reduced and subsequently

cost of production. The Chinese products are flooding the domestic market and this is

causing imbalance and is hurting the interests of Indian manufacturers. Moreover, anti

dumping duty is responsible for rising costs of raw materials and consequently higher cost of


National Productivity Council ii

production for the domestic industry. Something needs to be done urgently in this regard.

Power cuts are frequently coming in the way of production and the cost of labour also needs

to be rationalized in this sector. Working conditions are very poor in most of the operations

(especially polishing) that need to be upgraded. Over all this sector holds a lot of promise

provided these issues are addressed and some relief is provided.

Environmental issues stand out in importance in the present times for policy formulation

especially when there is pressure from developed countries to start shifting to green

technologies. As an initiative in this drive to go green, pollution boards of some cities are

compelling the units emitting polluting substances to relocate themselves out of the cities.

Many units from the utensils, cutlery and glassware sector have been issued notices to

relocate within a short period of time without any provision of industrial finance to relocate

or without sufficient infrastructure except new land has been identified.

As already mentioned, this sector is highly labour intensive and many of the steps involved in

manufacturing process used by the manufacturers are manual, which affects the finishing of

the final product. It acts as a hurdle in standardization of processes and product quality.

Thus, it is felt that there is need to bring about technology upgradation and automation so

that machines can substitute humans in tasks that need be done in dangerous environments

and performing tasks that are beyond the human capabilities. Attention needs to be focused

on recently launched lean manufacturing programme that MSME is implementing which may

provide some benefits to this sector as well.

To give the required thrust and promote wholesome development and growth of the sector in

order realize full potential of manufacturing units involved in the production of Utensils,

Cutlery, kitchen Tools and glassware products, the solution lies in taking full advantage of the

enormous opportunity of both production and employment that these industries offer. The

answer lies in taking full advantage of the Micro and Small Enterprises Cluster Development

Program (MSE-CDP) of the Ministry of Micro , Small and Medium Enterprises (MSME).


National Productivity Council iii

This programme comprises of need assessment of the clusters- the major component of the

scheme are Technology Upgradation, Quality Upgradation and Certification, Credit

Facilitation, Marketing Support, including exposure to global markets and Collective

Capacity Building of the cluster units with a view to enable them to ultimately operate as

collectives of their own. Establishment and operation of Common Facility Centres (CFCs),

organized procurement and marketing, continuous skill and technology upgradation are the

deliverables of any intervention under MSE-CDP. Recently, support for infrastructural

upgradation for resurgence of the clusters has also been included in the Micro and Small

enterprises Cluster Development Program.

The study has recommended interventions required to be undertaken by Government in

association with Industry Associations and manufacturing units with a view to make Utensils,

Cutlery and Glassware sector competitive both in the domestic as well as foreign markets.


National Productivity Council 1

Chapter 1

Introduction

1.1. Background

Utensils, Cutlery and Glassware are mainly manufactured by small and medium enterprises

spread across various clusters in India and provide employment to sizeable workforce. These

products are of immense daily use in the household and hence there is a large market base in

India with more than 250 million households. Utensils are of many varieties and the most

important of them being Kitchen Utensils used for the preparation of meals. They are used

for mixing, cutting, shucking, and many other activities in the kitchen. From mixers and

blenders to spatulas and whisks, there are utensils for the preparation of every type of meal,

and every level of cooking. Kitchen utensils should have good cooking efficiency by the

shape, size and thickness of the utensil. The utensil should be appropriate for its intended use

so that the kind of heat used will be distributed evenly. This will ensure proper preparation of

the food being cooked at the proper temperature. Kitchen utensils should offer versatility for

everyday use. They should provide plenty of flexibility for preparing many types of meals.

Durability and reliability are the two most important features of utensils, as they will stand up

to wear and tear, and last a lifetime.

Cutleries are the important items at the dining table for daily use. In the Western world

Cutlery and kitchen tools are referred as any hand implement used in preparing, serving, and

specially eating food. The major items in the cutlery and kitchen tools in the Western world

are knife, fork and spoon. In recent times, they have been made combining the functionality

of pairs of cutlery and kitchen tools like Spork (spoon/ fork), spife (spoon/ Knife), and knork

(knife/fork) or the Splayed which combines all three. Traditionally, good quality cutlery and

kitchen tools were made from silver, though steel was always used for more utilitarian

knives, and pewter was used for cheaper items, especially spoon. From the nineteenth

century, Electroplated Nickel Silver (EPNS) was used as a cheaper substitute; nowadays

most cutleries and kitchen tools, including quality designs, are made from stainless steel.

Another alternative is Melchior, a nickel alloy, which can sometimes contain manganese.



Plastic cutlery and kitchen tools are made for disposable use, and is frequently used outdoors,

at fast-food or take-away outlets, or provided with airline meals.

Traditionally local players dominated glassware sector, but the industry is witnessing a

number of global players planning to set up new units in India in the recent years. Container

glassware and glass based utensils have now established their place in every Indian House.

To match this intense competition domestic glass industry has been forced to expand its

capacities and diversify into newer areas. Besides the demand to build interior facades, the

changing architecture and aesthetic sense has created a strong market for reflective and thick

glass. However, in the present study the focus is on the glassware used in domestic segment

rather than industrial segment.

In view of the above, Department of Industrial Promotion and Policy (DIPP), Ministry of

Commerce & Industry has entrusted National Productivity Council (NPC) to carry out an

in-depth analysis and study on the Utensils, Cutlery & Kitchen Tools and Glassware sectors

in order to evolve strategies to increase productivity & competitiveness of the domestic

manufacturing units with a view to come out with implementable policy recommendation to

increase productivity and competitiveness of the sector.

1.2. Objectives of the study

The study was carried out with the following objectives.

1. To prepare a baseline report on utensils, cutlery, kitchen tools and glassware manufacturing sector in India.

2. Delineate strengths and weaknesses of the sector using SWOT analysis

3. To estimate productivity and Competitiveness of the sector vis a vis major competing countries such as China and South Korea.

4. To study the harmful aspects as a result of usages of some of the non-sticking utensils (e.g. frying pan).

5. Evolve strategies and government support mechanisms to improve productivity and competitiveness of the sector



1.3. Terms of Reference

1. To develop a baseline reports on utensils, cutlery, kitchen tools and glassware manufacturing sector in India encompassing details on growth trends, employment generation and export earning potential.

2. To estimate the productivity levels of the sector during the last ten years. 3. Impact of globalization on the growth of the sector. 4. To study the growth potential of the sector in terms of export earnings, employment

and income generation. 5. To undertake a SWOT analysis of the sector to identify the strengths and weaknesses

o f the sector in the wake of increasing international competition. 6. To develop unit specific case studies to identify critical factors for growth. 7. To identify sector specific infrastructure requirements of the sector. 8. To estimate productivity and Competitiveness of the sector vis a vis major competing

countries such as China and South Korea. 9. To study the harmful aspects of non-stick utensils usage (e.g. frying pan). 10. To suggest policy measures to support domestic manufacturing units to increase

market share in the wake of intense competition from China and South Korea.

1.4. Methodology

A study on Cutlery, Utensils & Glassware industry necessarily required pooling of technical

expertise not only from NPC but also from the industry and its associations, government and

domain experts. Hence for the conduct of the study a suitable team has been constituted as

follows:

• A multi disciplinary team of consultants have been drawn from economics, industrial engineering, energy, finance, management, metallurgy, IT etc., for conducting the study.

• Eminent experts from the field also have been included in the study team. • NPC Study team is headed by Dr. S.K. Pachauri, IAS (Rtd.), Former Director General

NPC. • A number of eminent experts from the concerned industry and industry associations

have been consulted from time to time on various aspects of the study.

Keeping in view the scope and the terms of reference of the study the sector has been

examined in detail by analyzing the data/ information both from primary and secondary

sources. Besides this, views and suggestions have also been sought through personal



interviews and discussions with various stake holders of the sector such as manufacturers,

associations, policy makers, experts/professionals, research and developmental institutions,

quality implementation agencies etc., on various aspects of the sector.

Primary data for the study has been collected with the help of a pre-tested questionnaire

specifically designed for the purpose covering the aspects such as basic profile of the

manufacturing unit, range of products manufactured, support for ancillaries, import,

infrastructure capability, investment, manpower and skill deployment, marketing channels

and hardships faced by the units along with other important indicators having a bearing on

productivity and competitiveness of the sector (Annexure 1). Details regarding the

manufacturing units included in the field survey from various clusters are given in Annexure

2. This exercise has been undertaken with a view to develop productivity and

competitiveness benchmarks for the sector so that remedial policy measures could be

developed.

Similarly, secondary information and data collected from a number of sources such as

published reports and data, directories of associations, industrial clusters, concerned

government departments, institutions engaged in the development of the sector. This would

be utilized to generate data / information with respect to overview, growth, spread,

investment, public private partnership for projecting the status of the industry. Secondary

data available from Annual Survey of Industries have been utilized for the estimation of

productivity using a detailed methodology (Annexure 3). Competitiveness of the sector has

been measured in terms of the observed trends of export-import data over the years.

First Phase: • First phase includes the preparation of a detailed baseline Report using both secondary

and primary sources of data and literature.

• The study focuses on different segments or product categories of the utensils, cutlery,

kitchen tools and glassware manufacturing sector across India.

• The study team also analyzed published literature and data related to the sector with a view to find out the status of utensils, cutlery, kitchen tools and glassware manufacturing sector in terms of productivity and competitiveness (domestic and export market).



• Emphasis has been given to analyze the impact of WTO agreements on the relative performance of the sector in the recent years.

• The research studies available have been consulted while arriving at a suitable analytical framework including a SWOT analysis of the sector.

• Apart from the detailed literature survey, the study team also compiled published industry specific data for the last ten years from the Central Statistical Organization (CSO), which brings out Annual Survey of Industries.

• The compiled data has been used for the estimation of productivity and export competitiveness indicators for the utensils, cutlery, kitchen tools and glassware manufacturing sector at national and international level.

• Relevant data published by various Utensils, Cutlery, Kitchen tools and Glassware manufacturing Associations in India have also been utilized for the study.

Second Phase: • Second phase of the study includes a detailed field survey of 232 utensils, cutlery,

kitchen tools and glassware manufacturing sector manufacturing units randomly selected

from different manufacturing clusters/ centres covering all major product categories.

Field survey has been carried out through a structured questionnaire (Annexure 1).

• The field survey covers small, medium and large Utensils, Cutlery, kitchen tools and

Glassware manufacturing and exporting units spread across India. The units have been

selected for the survey on the basis of a stratified random sampling procedure.

• The data has been analyzed using statistical tools to draw inferences based on

productivity and quality of Utensils, Cutlery, Kitchen tools and Glassware produced by

the sector.

• The study also includes diagnostic Case Studies of 8 Utensils, Cutlery, Kitchen tools and

Glassware manufacturing units selected from different parts of India to understand unit

specific problems such as production, raw material availability, marketing, finance,

productivity, export competitiveness etc., with a view to find out the scope for the

application of lean manufacturing techniques in Utensils, Cutlery, Kitchen tools and

Glassware manufacturing sector. The case studies have been carried out based on a

checklist.



1.4.1 Sample Size and Selection

Sample manufacturing units have been selected on the basis of the following criteria.

Sample should be of representative in nature covering all major clusters/centers.

Sample should be a true representative of the population covering all major product

categories.

Further, the sample should cover small, medium and large manufacturing units.

A list of the units has been prepared for the sector and the sample has been drawn based on

stratified random sampling procedure.

Various manufacturing units from major product categories falling under the different

product categories have been identified. Further, it has also been observed that the product

spectrum of many manufacturing units cut across more than one product categories.

Therefore, the selection of the units has been undertaken allocating priority to the major

product that is manufactured by the unit. While drawing the sample it was ensured that all the

product categories are taken in the sample. Growth of each product category was then

assessed. Since there is no such data available wherein the units have been categorized based

on their sizes, care has been taken to cover small, medium and large categories of

manufacturing units in the sample survey.

1.4.2 Data Analysis

The data both quantitative and Qualitative has been analysed using standard statistical

techniques and econometric tools to draw inferences based on productivity and

competitiveness of the sector.

The study includes a representative sample size of about 232 manufacturing units from

utensils, cutlery and glassware sector selected from different parts of India to understand unit

specific problems such as production, raw material availability, marketing, finance,

productivity, export competitiveness etc., with a view to find out the opportunities for

improvement in the sector.



As already mentioned, the percentage distribution of the sample units would be

proportionately drawn from different product categories. For example the total units selected

from the state/ region would be based on their proportion in the total population.

On proportionate basis, the coverage of product categories in various units based upon

proportional Region wise percentage distribution of manufacturing units came out to be 232

and has been taken to be the sample coverage in this study which ensured proper

representation covering all major clusters/centers and also a true representation of the

population covering all major product categories and major clusters. The selection of the

sample units at the state level has been undertaken on the basis of the concentration of the

product categories within the state. Since the data pertaining to the scale of investment of

various units are not available, care has been taken to cover all the categories (small,

medium, large) in the field survey. A few units dealing with export/import have also been

included in the study.

1.5. Limitations

• Originally the study was scheduled to be completed within six months time period.

However, due to number of extraneous factors beyond the control of the study team

such as General Elections to 13th Lok Sabha during April and May 2009 most of the

industrial associations and manufacturing units were reluctant to cooperate with the

field surveys. Hence the field surveys had to be re-scheduled leading to delays in

completion of study.

• Since most of utensils, cutlery and glassware manufacturing units are micro, small

and medium enterprises many of them are not maintaining records or data on factor

inputs and sales revenue for the previous years. As a result, the study had to be

conducted based on discussions and other related information mainly from the

memory of respondents to arrive at the productivity and competitiveness related

factors.

• Most of the family owned units were reluctant to share manufacturing related data

and information due to the fear of information reaching to their competitors or

business rivals.



Chapter 2

Review of Utensils, Cutlery and Glassware Sector

2.1. Utensils Sector

Utensils are very important to a household and society because we cannot live without eating

so we cannot do without utensils. In fact, the utensils that are used to cook food often do

more than just holding food. Quality of food, social status and etiquettes are also reflected in

the kind and types of utensils used. People from the ancient time began to learn how to make

cooking utensils to cook food. Cultural evolution and development of distinct societies has

led to remarkably different and distinct food preferences, eating habits and customs, choice

of food and serving styles. This has led to development of distinct kinds of utensils in every

culture, throughout the world. Although superficially utensils across the world might come in

varied designs and even more diverse sizes and of different materials, but the basic purpose

of utensils remains same. Utensils are broadly classified as cookware and kitchenware.

2.1.1 Utensils industry in India

Cookware is an industry known for its unwillingness to spend large sums of money on

consumer promotions. Cookware companies traditionally have competed very quietly by

selling low-priced products. Cookware products include a range of kitchen utensils used for

cooking and various other purposes.

Indian Cookware Industry: India has a large market of cookware industry comprising of

many Indian manufacturers, exporters and suppliers. The suppliers of wholesale cook wares

nurture the requirements of every category of buyer who are scattered throughout India.

Different varieties of cook wares are available for different industrial & domestic purposes.

Aluminum Utensils are increasingly becoming popular among the inhabitants of the

country. The products which are largely in demand are tea kettles, milk cans and other

household utensils.



Stainless Steel Utensils: India's production of stainless steel has reached 2 million tonnes

during 2007-2008. Production has grown at about 14% per annum over the last 15 years.

Currently 75% of the end use market of stainless steel is in Utensils, Cutlery and Kitchen

tools segments. The stainless steel industry in India is in an upbeat mood.. In the utensils

sector, 200 series grade is used, of which Jindal Stainless is the largest producer in India.

Stainless steel cookwares are widely exported to US.

India, being culturally rich and diverse country, has a special place for beautiful and

utilitarian pottery & kitchenware. It has a bustling market especially during the auspicious

season of Deepawali, a festival that marks gift exchanging of the level matched only by

festival like Christmas internationally.

Approximately 10 crore rupees per month worth of Pottery, Kitchenware & Glassware is sold

specially during the season of Deepawali and making India a very lucrative market for such

business for everyone.

The Indian cookware industry continues to meet the consumer demand for quality, durability,

style and attention to health concerns. Multi-versatile cookware that functions as bake ware,

serve ware and dinnerware is becoming increasingly popular as the casual style trend

continues.

Leading Countries in Kitchen tools and cutlery business in the world

Australia Germany Netherlands

Austria Ireland Singapore

Belgium-Luxemburg Italy Spain

Canada Japan Switzerland

China Malaysia U.K.

Denmark Mexico USA

France



2.2. Cutlery Sector

Various types of hand implements used for cutting, preparing, and eating food are termed as

cutlery. In traditional sense cutlery composed of cutting instruments and tools such as knives,

forks, and spoons used as tableware. In the recent times the scope of term cutlery has

broadened and has come to encompass tools used for cooking and serving food. Accordingly

cutlery implements are classified into two types on the basis of its usage.

CUTLERY

Kitchen and table cutlery Non-kitchen and non-table cutlery

2.2.1 Cutlery industry in India

Cutlery implements are classified on the basis of materials used and also on the basis of

methods they are manufactured. The cost of cutlery therefore, depends upon these factors.

Though it is a vast field, in this study we have focussed on cutlery implements made of

stainless steel only.

Modern cutlery includes a large number of articles which are not strictly cutting instruments,

but owing to their more or less intimate relation to table or pocket cutlery, are grouped with

such articles for convenience sake. A steel table or carving fork, for example, is an important

article of cutlery, although it is not a cutting tool. Some of the cutlery items are used to serve

the decoration purpose such as swords of different kind.

Due to its high durability, ease of moulding and forging, affordability and availability steel

has become one of the best choices for making cutlery globally. Steel cutlery industry began

with the discovery of steel. Henry Brearley was the inventor of stainless steel. Brearley was

looking for steel with better resistance to erosion, not corrosion. The first true stainless steel

was melted on August 13, 1913. It contained 0.24% carbon and 12.8% chromium.



Stainless steel’s one unique advantage over carbon steel is its high resistance to corrosion.

This resistance to corrosion is due to the naturally occurring chromium-rich oxide film

formed on the surface of the steel. Over the years a stainless steel knife can literally be worn

away by daily use and by being re-sharpened and will still remain stainless. Silver plated

cutlery will eventually wear through to the base alloy, but stainless steel cutlery cannot wear

through.

2.2.2 Raw Material for Cutlery Industry

To have a thorough understanding of any industry it is necessary to know about its back-

bone, that is the raw materials. The first and foremost thing to know is about raw materials.

The Steel cutlery industry depends on availability and quality of raw material which is steel

in the present case.

Steel is essentially a combination of iron and carbon. All steels contain certain other elements

in small controlled amounts, like Manganese, Sulfur, Silicon, and Phosphorus. If nothing else

is present, the steel is referred to as plain carbon steel.

Steel used for knife blades is strengthened with additive elements and are called alloy steels.

These additives impart specific properties to the steel. Alloy steels that have additions to

make them corrosion-resistant are labelled as stainless steels, and these steels are most

frequently used in making knife blades.

Stainless steel is a combination of steel, chrome and nickel. The finest grade of metal used in

producing quality steel is 18/8 stainless steel. It contains 18 percent chrome, 8 percent nickel.

Stainless steel is very popular because of its easy care, durability, low maintenance and low

price.

The formation of stainless steel begins by melting steel in a furnace. Alloying elements are

added to the molten steel, and is poured into molds called ingots. Once the ingots get

solidified, they are processed in milling machines to make usable shapes and sizes (plates,

coils, etc.). Buck Knives uses plates and coils, depending on the type of steel and its



thickness. Plates are turned into knife components by laser cutting and coils are shaped into

components using a fine blanking press.

Industry Profile: All manufacturers of hand tools, small and cutting tools are exempted

from obtaining an industrial licence to manufacture. The de-licensed undertakings, however,

are required to file an Industrial Entrepreneur Memoranda (IEM) with the Secretariat of

Industrial Assistance (SIA). No further approval is required beyond IEM. Immediately after

commencement of commercial production, Part B of the IEM has to be filled in. A number of

items of hand tools, small and cutting tools are reserved for manufacture in the small scale

sector.

2.3 Glassware Sector

Generally the term “glass” refers to hard, brittle, transparent material which is commonly

used for making windows panes, bottles, container glass or eyewear. Technically glass is an

inorganic product of fusion which is solidified through the glass transition to a rigid

condition without crystallizing. It is usually transparent or translucent material that has as

such no crystalline bonding structure but still behaves like a solid.

Glass plays an essential role in science, industry and domestic domains. The optical and

physical properties of glass make it suitable for applications such as flat glass, container

glass, optics and optoelectronics material, laboratory equipment, thermal insulator (glass

wool), reinforcement fiber (glass-reinforced plastic, glass fiber reinforced concrete), utensils

and art. Glass is the most eco-friendly packaging media.

Composition of Glass: Common glass is generally composed of a silicate (such as silicon

oxide, or quartz) combined with an alkali and sometimes other substances. The quality and

variety of glass usually varies on the basis of ingredients used in its production. Some of the

major contents of glass are: Pure Silica, Sodium Carbonate / Soda Ash, Calcium Oxide /

Lime, Magnesium Oxide, Aluminium Oxide and Dolomite. These are the contents used in

production of most common type of glass which is ‘SODA-LIME GLASS’. There are other

contents as well, which are added to change the properties of glass.



2.3.1 Glass Industry in India

The Indian glass industry has a rich history. At the time of independence annual production

of glass was a mere 30 thousand tonnes. At present, the industry produces over 1 Million

Tonnes of various types of glass including hollow-ware and press-ware flat glass, sheet wired

and figured glass. From mouth blown and hand working processes, it has led to automation

in a big way, although traditional manufacturing processes have not been abandoned. Mouth

blown and handcrafted glassware plays a dominant role in decorative, ornamental and table

glassware products which are exported in large quantities. Raw materials required by the

industry are available locally, providing excellent scope for growth and development. The

Indian glass industry is poised at an interesting point. Products of world-class quality are

easily available in India. Indian architects and designers have shown interest in design

possibilities with glass and have responded to customers requirements enthusiastically.

Glass has wide spread applications in construction, transport vehicles and household goods.

In many of these uses there are no substitute materials. Glass competes with plastics and

aluminium for many packaging applications. Because glass is an inert material and does not

react to chemicals, glass containers are of much importance for industries like

pharmaceuticals, dairy products, processed food, cosmetics, beverages, infusion products,

distilleries and breweries. According to a survey conductes by Madras Consultancy Group

(MCG) in 2002-2003 on the global packaging industry, it was estimated that the worldwide

packaging industry is about USD 600 Billion including all types of packaging material

namely paper & board, plastic and glass. The report also highlighted the total packaging

sector of India which was estimated at Rs 280 – 300 billion per annum. Out of which total

consumer packaging market is around Rs 140 Billion.The glass bottles market for consumer

packaging in India is about Rs 16 Billion which as a whole represents 12 per cent market

share of packaging media.

Glass bangles are used as an ornament by a large number of women in India. The glass

industry is labour intensive and provides both direct (manufacture of glass) as well as indirect

(mining and transport of raw materials) employment. Though the share of glass in total gross

value added is lower as compared to other industries, its energy consumption per unit of

output is rather high.



The Indian glass industry has been growing across all segments. Sheet and float glass have

recorded the fastest growth, at a CAGR of nearly 67 per cent during 2001 to 2005. This

growth has been driven primarily by India’s booming automotive and construction sectors

which have been key drivers of the economy in the past five years. Other glassware such as

bottles and fibre glass have recorded more modest growth rates of about 5-6 per cent CAGR

over the same period.

The glass industry covers products such as:

• flat glass : which includes sheet glass, float glass, figured and wired glass, safety

glass and mirror

• glass hollow wares and containers

• vacuum flasks

• laboratory glassware

• fibre glass

2.4 Major Manufacturing Clusters of Utensils, Cutlery, Kitchen tools and Glassware

products in India

Table 2.1 provides a compilation of major manufacturing clusters for Utensils, Cutlery,

Kitchen tools and Glassware in India along with major product categories.

Table 2.1 Major Utensils/ Cutlery, Kitchen Tools and Glassware Manufacturing Centers & product categories

Manufacturing Clusters Product Categories –

Utensils/Cutlery/Kitchen Tools Product Categories - Glassware

Firozabad/New Delhi

• Bowls • Carving Knife • Coffee Boiler • Cooler, Electric Urn • Dinnerware • Electric Coffee Boiler • Fork • Fry Pan • Ice Bucket • Knife

• Beer mug • Bottles of liquor & beer • Bowls • Chatons • Dinnerware • Glassware • Jars • Jugs • Parfait glass • Pharmaceuticals



• Mug, Mug with Lid • Peeling Knife • Pots • Rectangular Tray • Round Tray • Slicing • Splayed • Spoon • Spork • Tea Pot • Teapots • Teapots Electric Coffee

Boiler • Thali • Tongs • Tray • Water Pitcher

• Pots • Tableware • Tea Pot • Tray • Tubes & Bulb • White wine glass • Furniture • Perfume & Cosmetic

Bottles • Container • Handicrafts • Decorative glassware

Mumbai

• Fork • Fry Pan • Ice Bucket • Knife • Mug, Mug with Lid • Peeling Knife • Pots • Bowls • Carving Knife • Coffee Boiler • Cooler, Electric Urn • Dinnerware • Electric Coffee Boiler • Round Tray • Slicing • Splayed • Spoon • Spork • Tea Pot • Teapots • Teapots Electric Coffee

Boiler • Thali • Tongs • Tray

• Tray • Tubes & Bulb • White wine glass • Furniture • Perfume & Cosmetic

Bottles • Container • Handicrafts • Decorative glassware • Beer mug • Bottles of liquor & beer • Bowls • Chatons • Dinnerware • Glassware • Jars • Jugs • Parfait glass • Pharmaceuticals • Pots • Tableware • Tea Pot

Kolkata

• Dinnerware • Electric Coffee Boile • Round Tray • Slicing • Splayed • Spoon

• Bowls • Chatons • Dinnerware • Glassware • Jars • Jugs



• Spork • Tea Pot • Teapots • Teapots Electric Coffee

Boiler • Thali • Tongs • Tray • Fork • Fry Pan • Ice Bucket • Knife • Mug, Mug with Lid • Peeling Knife • Pots • Bowls • Carving Knife • Coffee Boiler

• Parfait glass • Pharmaceuticals • Pots • Tableware • Tea Pot • Tray • Tubes & Bulb • White wine glass • Perfume & Cosmetic

Bottles • Container • Handicrafts • Decorative glassware • Beer mug • Bottles of liquor & beer

Chennai

• Thali • Tongs • Tray • Fork • Fry Pan • Ice Bucket • Knife • Mug, Mug with Lid • Peeling Knife • Pots • Bowls • Dinnerware • Electric Coffee Boile • Round Tray • Slicing • Splayed • Spoon • Spork • Tea Pot • Teapots • Carving Knife • Coffee Boiler

• Jugs • Parfait glass • Pharmaceuticals • Pots • Tableware • Tea Pot • Tray • Tubes & Bulb • White wine glass • Perfume & Cosmetic

Bottles • Container • Bowls • Chatons • Dinnerware • Glassware • Jars • Handicrafts • Decorative glassware • Beer mug • Bottles of liquor & beer



Chapter 3

Productivity of Utensils, Cutlery and Glassware Sector

3.1 Introduction

Utensils, Cutlery and Glassware manufacturing units exist in clusters throughout the country.

The sector comprises of both registered and unregistered sector. There exists around 6000

manufacturing units across India in the registered sector. Since no data exists for the units in

the unregistered sector, we have analyzed productivity performance of registered

manufacturing units in this chapter. The registered factory sector occupies an important

position in utensils, cutlery and glassware sector in India*1. Structurally, the registered

factory sector consists of both small scale and large-scale enterprises. The growth of the

registered factory sector can be easily visualized and the implications of government policy

(both domestic and global) can be easily assessed since the data is available on a continuous

time series. Considering these facts an attempt has been made in the following sections to

analyze the growth of utensils, cutlery and glassware sector (organized factory sector/

registered manufacturing) in India.

3.2 Key Performance Indicators of the Registered Factory Sector

3.2.1 Utensils sector- Registered Factory Sector

A brief analysis of the utensils sector (registered manufacturing) at the All India level

suggests that the industry has experienced a modest growth in terms of Gross Value Added

over the years (Table 3.1). The employment during 1999-00 to 2005-06 has shown positive

trends and has grown at a compound annual growth rate of 9.5 percent. The industry has

shown positive growth trends during 1999-00 to 2005-06 in terms of number of factories and

value of output at constant prices. Thus, the statistics suggest the positive growth of

* 1(Factory is one that is registered under sections 2m (i) and 2m (ii) of the Factories Act, 1948. The sections 2m (i) and 2m (ii) refer to any premises including the precincts thereof (a) whereon ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on; or (b) whereon twenty or more workers are working or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on).



registered utensils manufacturing in India in the recent years. It may be due to globalisation

and expansion of Indian economy and change in lifestyles of citizens.

Table 3.1 Characteristics of Utensils Manufacturing sector- Registered Factory Sector

(Values in Rs. lakhs, others in numbers)

Indicators 1999-00 2002-03 2005-06 Compound Annual

Growth Rate (CAGR) (%) (1999-00 to 2005-06)

Number of Factories 2306 2559 3056 4.8

No. of Persons Employed 74968 86422 129189 9.5

Gross Value Added (Constant Prices 1993-94=100) 79298 90777 111727 5.9

Value of Output (Constant Prices 1993-94=100) 389084 526054 662745 9.3

Capital stock (Constant Prices 1993-94=100)

174616 111295 164833 -1.0

Source: Estimations from Annual Survey of Industries 3.2.2 Cutlery sector: Registered Factory Sector

Table 3.2 shows that cutlery sector has shown a dismal performance during 1999-00 to

2005-06. The number of factories and the gross value added at constant prices declined

during this period. The Compound Annual Growth Rate (CAGR) of gross value added has

been -3.2% for this period. But it is intriguing that the number of persons employed has

remained almost stagnant even when number of factories and value of output has gone down.

Probably, bigger players may have grown and employed more labor and smaller players left

the field altogether. Further, the level of capital stock has fallen drastically with a CAGR of

about -21.6% during the period 1999-00 to 2005-06.



Table 3.2 Characteristics of Cutlery manufacturing sector: Registered Factory Sector

(Values in Rs. lakhs, other in numbers)



Number of Factories 2174 1898 1702 -4.0


Gross Value Added (Constant Prices 1993-94=100)

62866 66157 51787 -3.2

Value of Output (Constant Prices 1993-94=100)

253975 290302 248169 -0.4


141676 80234 32820 -21.6

Source: Estimations from Annual Survey of Industries 3.2.3 Glassware sector: Registered Factory Sector

A brief look at the Glassware sector (registered manufacturing) at the All India level suggests

that the industry has experienced significant growth in terms of Gross Value Added during

1999-00 to 2002-03 (Table 3.3). However, the employment during 1999-00 to 2002-03 has

shown slightly negative trends. It shows that the labour productivity and Gross output per

unit had been increasing for the period 1999-00 to 2002-03

But a comparison between the levels of 2002-03 and 2005-06 reveals negative trends. The

value added and value of output have declined for this period. The number of workers and

the number of factories have increased for the period 2002-03 to 2005-06. It shows that the

labour productivity and Gross output per unit declined during 2002-03 to 2005-06.



Table 3.3 Characteristics of Glassware manufacturing sector: Registered Factory Sector

(Values in Rs. lakhs, others in numbers)



Number Of Factories 652 560 601 -1.3


Gross Value Added (Constant Prices 1993-94=100)

59699 79999 68091 2.2

Value of Output (Constant Prices 1993-94=100)

229838 286471 248906 1.3


376127 254738 299315 -3.7

Source: Estimations from Annual Survey of Industries, CSO

Among the three sectors, utensils sector has shown the best performance with modest growth

rates for gross value added and value of output. However, the extent to which Indian utensils,

cutlery and glassware industry can grow and emerge as a leader depends on its competitive

potential. Since, all the three sectors, be it organized or unorganized, are basically labour

intensive, the improvement in labour productivity will primarily govern the competitiveness

of the sector.

3.3. Estimation of Productivity

Gross value added (Net value added + Depreciation) has been considered as output for the

estimation of productivity ratios. In order to eliminate the price effect from the value added,

the gross value added figures have been deflated by using the whole-sale Price Index (WPI).

From the WPI, price index for basic metals, alloys and metal products at 1993-94 base prices

has been used for calculation purposes for deflating the data on gross value added since it

covers almost all categories of products from the sector.

In this section we estimate partial (labour and capital) and total factor productivity growth

rates for cutlery, utensils and glassware sector at All India level for the period 1999-00 to

2005-06. As explained in the earlier section, Gross value added (net value added +

depreciation) is considered as the measure for output. It is assumed that there are only two



major resources/inputs of production viz. labour and capital. Labour is the total persons

engaged in manufacturing or production process of cutlery, utensils and glassware products

while capital is the real value of capital investment (at constant 1993-94 prices) in the

manufacturing process. Detailed methodology used for the construction of variables and the

estimation procedure adopted is given in Annexure 3.

3.3.1 Utensils sector

Table 3.4 provides partial productivity estimates (Gross Value Added per unit of input) for

both capital and labour. It may be noted that the capital productivity ratios exhibit consistent

growth rates during 1999-00 to 2005-06 except in the year 2003-04 while Labour

productivity exhibits consistent decline during 2000-01 to 2005-06. For example, capital

productivity increased from Rs. 0.45 per unit of every rupee invested during 1999-00 to Rs.

0.68 by 2005-06.

Table 3.4: Partial Productivity Estimates for Labour and Capital inputs

Year Capital Productivity (Rs.)

Labour Productivity (Rs.)

Capital Intensity*

1999-00 0.45 105776 2.33

2000-01 0.62 108958 1.76

2001-02 0.75 107557 1.44

2002-03 0.82 105040 1.29

2003-04 0.71 91425 1.28

2004-05 0.87 86568 0.99

2005-06 0.68 86483 1.28

*Capital Intensity = Capital/No. of persons employed Source: Computed from Annual Survey of Industries, CSO, Summary Results of Factory Sector

On the other hand, labour productivity declined from Rs. 105776 per person engaged in

1999-00 to Rs. 86483 per person engaged in 2005-06. This indicates the technological

contribution in the increased capital productivity of utensils sector and it is mainly due to the

rise in capital investment during the period 1999-00 to 2005-06.



Table 3.5 provides the growth rate estimations for labour and capital productivity along with

Total Factor Productivity Growth. Growth rate estimations reveal considerable variations

across the year 1999-00 to 2005-06. Average growth rate computed for this time period

1995-96 to 2000-01 shows positive trends for capital and total factor productivity but

declining trends for labor productivity.

Table 3.5: Growth of Labour, Capital and Total Factor Productivity (%)

Year Capital

Productivity Growth

Labour Productivity

Growth

Total factor Productivity

Growth 1999-00 -- -- --

2000-01 36.10 3.01 -8.41

2001-02 20.83 -1.29 -27.44

2002-03 9.22 -2.34 4.50

2003-04 -12.67 -12.96 10.26

2004-05 22.55 -5.31 -11.31

2005-06 -22.35 -0.10 40.19

Average for the Period 2000-2005

8.95 -3.16 1.30

Source: Computed from Annual Survey of Industries, CSO, Summary Results of Factory Sector

Table 3.6 depicts the productivity growth rates of labour, capital and total factor productivity

in an index. It may be seen that though capital productivity has increased substantially but the

total factor productivity has slightly increased during 1999-00 to 2005-06. This is an aspect

of worry for the utensils sector in India since the investment in technology has not resulted

proportionate increase in productivity.



Table 3.6: Index of Labour, Capital and Total factor productivity Growth

Year Capital

Productivity Growth

Labour Productivity

Growth


Growth 1999-00 100 100 100

2000-01 136.10 103.01 91.59

2001-02 156.93 101.72 64.14

2002-03 166.15 99.38 68.64

2003-04 153.47 86.42 78.90

2004-05 176.03 81.11 67.59

2005-06 153.68 81.01 107.78


Fig. 3.1: Index of Labour and Capital Productivity Growth



3.3.2 Cutlery sector

Table 3.7 provides partial productivity estimates (Gross Value Added per unit of input) for both

capital and labour for the cutlery sector. Capital productivity has increased substantially during

1999-00 to 2005-06. Capital productivity has increased from Rs. 0.44 per unit of every rupee

invested during 1999-00 to Rs. 1.58 in 2005-06. And labour productivity declined from Rs. 114474

per person engaged in 1999-00 to Rs. 93044 per person engaged in 2005-06.


Year Capital Productivity

(Rs.) Labour Productivity

(Rs.) Capital Intensity

1999-00 0.44 114474 2.58

2000-01 0.84 124570 1.49

2001-02 0.63 109316 1.74

2002-03 0.82 114696 1.39

2003-04 1.18 116201 0.99

2004-05 1.11 98669 0.89

2005-06 1.58 93044 0.59


Table 3.8 provides the growth rate estimations for labour and capital productivity along with

Total Factor Productivity Growth. Growth rate estimations reveal that for the period 1999-00

to 2005-06 capital productivity showed positive and substantial growth except for two years

2001-02 and 2004-05. Average growth rates computed for this time period 1999-00 to 2005-

06 show positive capital productivity and negative labour and total factor productivity growth

rates. This indicates that the investment in technology has not been generating proportionate

increase in productivity.




Year Capital

Productivity Growth

Labour Productivity

Growth


Growth 1999-00 -- -- --

2000-01 88.68 8.82 -43.40

2001-02 -25.16 -12.25 19.30

2002-03 31.59 4.92 -14.92

2003-04 42.74 1.31 -31.56

2004-05 -5.92 -15.09 -1.85

2005-06 42.50 -5.70 -19.80

Average for the

Period 2000-2005 29.07 -3.00 -15.37


Table 3.9 depicts the productivity growth rates of labour, capital and total factor productivity

in an index. It may be seen that though capital productivity increased substantially, labor

productivity remained more or less stagnant and total factor productivity declined

substantially during the study period. This is because the capital stock in this sector has been

declining while the number of persons engaged in this sector has remained stagnant during

the study period.



Table 3.9: Index of Labour, Capital and Total Factor Productivity Growth Rates

Year Capital

Productivity Growth

Labour Productivity

Growth


Growth 1999-00 100.00 100.00 100.00

2000-01 188.68 108.82 56.60

2001-02 163.52 96.57 75.89

2002-03 195.11 101.50 60.97

2003-04 237.85 102.81 29.40

2004-05 231.94 87.72 27.55

2005-06 274.44 82.02 7.75


Fig.3.2: Index of Labour, Capital and Total Factor Productivity Growth Rates

3.3.3 Glassware sector

Table 3.10 provides partial productivity estimates (Gross Value Added per unit of input) for

both capital and labour. It may be noted that both the Capital productivity and Labour



productivity ratios don’t exhibit any consistent trend during 1999-00 to 2005-06. For

example, capital productivity increased from Rs. 0.16 per unit of every rupee invested in

1999-00 to Rs. 0.34 in 2001-02 but declined in the subsequent year, then again rose and

finally declined to the level of Rs. 0.23 in the year 2005-06.


Year Capital Productivity (Rs.)

Labour Productivity (Rs.)

Capital Intensity*

1999-00 0.16 118565 7.47

2000-01 0.17 135007 7.89

2001-02 0.34 169258 5.04

2002-03 0.31 165675 5.28

2003-04 0.35 160838 4.62

2004-05 0.39 162397 4.21

2005-06 0.23 124020 5.45


Similarly, labour productivity increased from Rs. 118565 per person engaged in 1999-00 to

Rs. 169258 per person engaged in 2001-02 and finally declined to Rs. 124020 in the year

2005-06.

Table 3.11 provides the growth rate estimations for labour, capital and Total Factor

Productivity Growth. Growth rate estimations don’t show any clear pattern during the study

period 1999-00 to 2005-06. Average growth rate computed for this time period 1999-00 to

2000-01 reveals the positive trends for capital and labor productivity and negative for total

factor productivity.




Year Capital

Productivity Growth

Labour Productivity

Growth


Growth 1999-00 -- -- --

2000-01 7.81 13.87 5.83

2001-02 96.40 25.37 -32.11

2002-03 -6.55 -2.12 -9.50

2003-04 10.89 -2.92 -14.50

2004-05 10.64 0.97 2.37

2005-06 -40.96 -23.63 27.97

Average for the Period 2000-2005

13.04 1.92 -3.32


Table 3.12 depicts the productivity growth rates of labour, capital and total factor

productivity as an index. It may be seen from the table that though capital productivity and

labour productivity increased, total factor productivity in fact declined during the study

period. This is an aspect of worry for the glassware sector in India since the contribution of

technology is declining.

Table 3.12: Index of Labour, Capital and Total Factor Productivity Growth Rates

Year Capital Labour Total factor Productivity

1999-00 100.00 100.00 100.00

2000-01 107.81 113.87 105.83

2001-02 204.21 139.24 73.72

2002-03 197.66 137.12 64.22

2003-04 208.55 134.20 49.72

2004-05 219.19 135.17 52.09

2005-06 178.23 111.54 80.06




Fig.3.3: Index of Labour, Capital and Total Factor Productivity Growth Rates

3.4 Conclusion

From the analysis of productivity growth across utensils, cutlery and glassware sector, it may

be noted that the labour productivity across the registered segments of the manufacturing

sector has been declining during the period 1999-00 to 2005-06. It may also be noted that

capital productivity growth has been quite significant indicating the declining investment in

the sector. In the case of total factor productivity it has been noticed for all three sectors that

the contribution of the technological progress to productivity growth has been negative. This

indicates that there is urgent need for augmenting capital investment in the sector for making

this sector more productive and competitive.



Chapter 4

Export Competitiveness of Utensils, Cutlery and Glassware Sector

4.1 Introduction

The importance of exports in the growth of an industry cannot be underestimated in the era of

globalization. According to the theory of comparative advantage, in a globalised world

countries will produce and export the products in which they have a comparative advantage

and rely on imports for products in which they don’t have comparative advantage. Following

this theory, we see that in the present scenario developing countries have comparative

advantage in labour intensive products including utensils, cutlery and glassware. So, there

exists a huge opportunity for these labour intensive sectors of India to grow and make their

presence at the international platform. However, it is to be noted that only those countries,

which offers the best deal in terms of competitiveness & efficiency among global firms will

be able to gain from such opportunities. Those firms who are efficient will be able to offer

the best quality products at best prices and thus competitiveness will ensure their survival.

In this chapter, export and import trends for India over the last ten years have been analysed.

We have used data available from Ministry of Commerce & Industry, Government of India,

website based on HS codes for finding trends in international trade for these sectors. Further,

we have also compared the trends in exports and imports of India for these sectors in India

and the competing countries especially China and Korea. And in the last section, we have

analysed export competitiveness of India relative to China and Korea based on inter country

trade statistics between these three countries durimg 2003-04 to 2007-08.

4.2 Export Performance

4.2.1 Utensils Sector

Exports in the utensils sector has been growing over the years from the levels of US $31.69

million in 2003-04 to US$131.9million in 2007-08, posting a phenomenal progress over the

past five years (Table 4.1). The imports in this sector have also increased rapidly during the

same period from US $0.06 million to the level of US$0.88 million, but they are negligible as



compared to exports (Table 4.2). The pattern of trade over the years from 2003-04 to 2008-

09 can also be seen from the tables and graphs given below.

Table 4.1: Status of Exports of Utensil

(Values in US $ Million)

*Apr-Sept 2008-09 Source: India’s trade statistics, www.commerce.nic.in Table 4.2: Status of Imports of Utensil

(Values in US $ Million)

Apr-Sept 2008-09 Source: India’s trade statistics, www.commerce.nic.in

Years Exports %Growth

2003-04 31.69

2004-05 54.44 72%

2005-06 78.82 45%

2006-07 92.59 17%

2007-08 131.9 42%

2008-09* 91.37

Years Imports %Growth

2003-04 0.06 2004-05 0.17 183%

2005-06 0.39 129%

2006-07 0.45 15%

2007-08 0.88 96%

2008-09 0.7



4.2.2 Cutlery Sector

The exports in the cutlery sector (HS Code 82) have grown over the years from the levels of

US $178.34 million in 1999-00 to the levels of US $421.5 million in 2008-09, showing a

good growth after 2004 (Table 4.3). The imports in this sector have also increased rapidly

during the same period from US $108.9 million to the level of US $444.62 million, matching

up with the level of exports (Table 4.4). The pattern of trade over the years and values for all

the years from 2003-04 to 2008-09 can also be seen from the tables and graphs given below.

Table 4.3: Status of Exports of Cutlery (Values in US $ Million)

HS Code: 82

*Apr-Sept 2008-09 Source: India’s trade statistics, www.commerce.nic.in

If we look carefully at these patterns we find that though exports have been rising, the

imports have risen at greater pace than the exports, even surpassing the exports levels in the

year 2008-09 and thus leading to negative net exports over time. This requires deeper

research to explain such a pattern. The pattern for net exports and growth rates are presented

in figures given below.

Years Exports %Growth

1999-00 178.34

2000-01 223.26 25%

2001-02 214.02 -4%

2002-03 233.51 9%

2003-04 297.62 27%

2004-05 233.51 -22%

2005-06 297.62 27%

2006-07 370.69 25%

2007-08 534.09 44% 2008-09* 421.45



Table 4.4: Status of Imports of Cutlery (Values in US $ Million) HS Code: 82


Table 4.5 : Net Exports of Cutlery (Values in US $ Million) HS Code : 82

years net exports %Growth

1999-00 69.44

2000-01 114.36 65%

2001-02 117.32 3%

2002-03 113.76 -3%

2003-04 149.78 32%

2004-05 11.96 -92%

2005-06 -3.41 -129%

2006-07 8.54 -350%

2007-08 59.55 597%

2008-

09* -23.17 -139%


Years Imports %Growth

1999-00 108.9

2000-01 108.9 0%

2001-02 96.7 -11%

2002-03 119.75 24%

2003-04 147.84 23%

2004-05 221.55 50%

2005-06 301.03 36%

2006-07 362.15 20%

2007-08 474.54 31%

2008-09* 444.62



4.2.3 Glassware Sector

The exports in the Glassware sector have grown over the years from the levels of US $90.82

million in 1999-00 to the levels of $377.72 million in 2007-08, showing a considerable

growth after 2004 (Table 4.6). The imports in this sector have also increased rapidly during

the same period from $100.73 million to the level of US $417.73 million, matching up with

the level of exports (Table 4.7). The pattern of trade over the years and values for all the

years from 1999-00 to 2008-09 can also be seen from the graphs given below.

Table 4.6 : Status of Exports of Glassware (Values in US $ Million)

HS Code: 70 Years Exports %Growth

1999-00 90.82

2000-01 136.64 50%

2001-02 139.31 2%

2002-03 174.13 25%

2003-04 210 21%

2004-05 218.23 4%

2005-06 235.73 8%

2006-07 307.36 30%

2007-08 377.72 23%

2008-09* 329.64

*Apr-Sept 2008-09

Source: India’s trade statistics, www.commerce.nic.in

Though the data suggests that exports for the whole glass and glassware sector have

increased, the exports for the glassware items, which has been the focus of this study, have

also increased. There has been phenomenal increase in import of glass and glassware

products especially from countries like China.



Table 4.7: Status of Imports of Glassware (Values in US $ Million)

HS Code: 70 Years Import %Growth

1999-00 100.73

2000-01 104.79 4%

2001-02 135.69 29%

2002-03 119.67 -12%

2003-04 161.57 35%

2004-05 216.92 34%

2005-06 295.2 36%

2006-07 332.35 13%

2007-08 417.73 26%

2008-09 350.51


4.3 Comparison of World Exports from India, China and Korea


Since the data specifically on the utensils items are not available, we have used the data for

Household equipment of base metal for the three categories to compare their performance on

the international trade front assuming that a high proportion of Household equipment of base

metal comprises of utensils. Based on this data, we see that exports of Korea are similar to

India’s in terms of volume while for China the volume is really huge at the level of US $

5,118,805 thousand in the year 2005 (Table 4.8). It is interesting to note that though India

and Korea started from about same level of exports, India has shown a better performance

over the years and has left Korea far behind, achieving the levels of US $ 556,307 thousand

in the year 2005. In fact, the exports of Korea have been declining over the years showing a

negative growth. This is clearly visible from the comparative graph.



Table 4.8 : Exports of India, China and Korea to the Rest of the world (RoW)

ITC codes: Utensils - Product group: 697 - Household equipment of base metal, n.e.s. (Values in US$ '000)

Year China %Growth Korea %Growth India %Growth

2001 1,982,167 365,698 373,174

2002 2,538,666 28% 345,936 -5% 395,685 6%

2003 3,262,556 29% 330,321 -5% 515,855 30%

2004 4,225,947 30% 334,235 1% 485,053 -6%

2005 5,118,805 21% 278,842 -17% 556,307 15%

Source: International Trade Statistics, ITC’s website www.intracen.org

If we compare the imports of the three countries we again find that the volume of imports for

Korea are the highest and has been rising over the years, the volumes for India are the lowest

but also rising. Though the volumes for India are the lowest, the growth rates for India have

been the highest over the years indicating a huge surge in demand for imported products in

this sector. On the other hand China has shown moderate growth rates but the base for the

growth is much bigger as compared to India.



Table 4.9: Imports of India, China and Korea from the Rest of the World (RoW)

ITC codes: Utensils - Product group: 697 - Household equipment of base metal, n.e.s. Values in US$ '000

Year China %Growth Korea %Growth2 India %Growth3

2001 49,890 97,253 8,450

2002 47,618 -5% 122,515 26% 8,218 -3%

2003 59,903 26% 135,940 11% 10,688 30%

2004 67,163 12% 139,632 3% 16,496 54%

2005 69,400 3% 156,404 12% 29,327 78%


Net exports is a key variable which enthralls policy makers to decide the future course of

action for policy formulation. In table 4.10 we present the figures for net exports and their

growth rates for all the three countries. It is quite apparent from the data that China has

posted the best performance among the three countries and India has also shown a reasonably

good performance with net exports rising over the years. India should take lessons from the

Chinese experience of rising growth rates even with such a large base. On the other hand

Korea has shown a dismal performance losing its competitiveness over the years.

Table 4.10: Net Exports of India, China and Korea to the Rest of the World (RoW)

ITC codes: Utensils - Product group: 697 - Household equipment of base metal, n.e.s. Values in US$ '000

Year China net

exports %Growth

Korea net

exports %Growth

India net

exports %Growth

2001 1,932,277 268,445 364,724

2002 2,491,048 29% 223,421 -17% 387,467 6%

2003 3,202,653 29% 194,381 -13% 505,167 30%

2004 4,158,784 30% 194,603 0% 468,557 -7%

2005 5,049,405 21% 122,438 -37% 526,980 12%



4.3.2 Cutlery Sector

If we compare the export performance of the three countries, we find that the volume of

exports is very huge for Korea and China as compared to India for the cutlery sector. But

India has shown a good performance in terms of growth as is visible from Table 4.11.

Table 4.11: Exports of India, China and Korea to the Rest of the World (RoW)

ITC codes: Cutlery: Product group: 696 Values in US$ '000 Year China %Growth Korea %Growth India %Growth

2001 1,012,170 230,322 39,593

2002 1,174,387 16% 184,503 -20% 40,468 2%

2003 1,489,448 27% 166,163 -10% 50,197 24%

2004 1,829,764 23% 162,011 -2% 63,856 27%

2005 2,095,396 15% 152,409 -6% 85,313 34%


India’s exports have increased from US $39,593

thousand in 2001 to US $85,313 thousand in

2005. In comparison, China has shown a modest

growth even with a large base and Korea’s

exports have declined over the years but still the

volumes are much higher than India.



Now, looking at the Imports figures (Table 4.12), we find that China again tops the chart in

terms of volumes for all the years, Korea comes the second and India comes third. While

China’s imports have declined after 2003, India’s imports have consistently increased over

the years. And Korea’s imports have more or less remined stagnant over the same period.

Table 4.12: Imports of India, China and Korea from the Rest of the World (RoW)

ITC codes: Cutlery: Product group: 696 Values in US$ '000 Year China %Growth Korea %Growth India %Growth

2001 75140 46234 6200

2002 86666 15% 52253 13% 5175 -17%

2003 125106 44% 56704 9% 9580 85%

2004 105859 -15% 56415 -1% 10140 6%

2005 101638 -4% 62443 11% 23567 132%


A high increase in India’s imports can be explained by change in lifestyles and demand for

more stylish international standard products. Such a surge can be a cause of concern for

domestic industry, but before that we should analyse at net exports which is given in Table

4.13.



After looking at export and import performance, we look at the net exports and in Table

4.13, where we present the figures for net exports and their growth. Figures reflect the

dominance of China.


ITC codes: Cutlery: Product group: 696 Values in US$ '000

Year China net

exports %Growth

Korea net

exports %Growth

India net

exports %Growth

2001 937,030 184,088 33,393

2002 1,087,721 16% 132,250 -28% 35,293 6%

2003 1,364,342 25% 109,459 -17% 40,617 15%

2004 1,723,905 26% 105,596 -4% 53,716 32%

2005 1,993,758 16% 89,966 -15% 61,746 15%

In term of volume, China being the

largest net exporter of cutlery among

the three concerned countries.

Moreover, China has also shown

modest growth over the five years. As

far as the performance of India is

concerned, it has performed strongly

as well with the volumes increasing

over the years helped by good annual growth rates. As it has already been mentioned that

Korea has shown a dismal performance which is clearly visible from the graph.


Now, we compare the export performance of three countries for the glassware sector.

Looking at the data, we find that the volume of exports is very huge in case of China as

compared to India and Korea. India’s exports have risen from US $63,589 thousand in the

year 2001 to US $160,567 thousand in 2005. Comparing the growth rates for the three

countries we find that all the three countries showed modest performance over these five



years. But China has been the standout performer to post such high growth rates even with an

already huge base.

Table 4.14 : Exports of India, China and Korea to the Rest of the world (RoW)

ITC codes: Glassware: Product group 665 Values in US$ '000 Year China %Growth Korea %Growth India %Growth

2001 559,895 101,168 63,589

2002 744,353 33% 92,746 -8% 77,157 21%

2003 974,500 31% 112,779 22% 99,738 29%

2004 1,435,786 47% 154,353 37% 109,632 10%

2005 1,828,987 27% 246,719 60% 160,567 46%


Now, looking at the Imports figures, we

find that China again tops the chart in

terms of volumes for all the years, Korea

comes the second and India comes the

third. Imports for all the countries have

consistently risen over the five years. In

terms of growth, India and China grew in

terms of volume, China being the largest

net exporter of glassware among the three

countries.



Table 4.15: Imports of India, China and Korea from the Rest of the world (RoW)

ITC codes: Glassware Product group 665 Values in US$ '000 Year China % Growth Korea % Growth India % Growth

2001 267,191 255,482 36,648

2002 340,032 27% 278,718 9% 35,440 -3%

2003 454,430 34% 293,564 5% 43,352 22%

2004 737,601 62% 316,391 8% 55,388 28%

2005 843,382 14% 319,397 1% 88,830 60%



Values in US$ '000 ITC codes: Glassware Product group 665

Year China Korea India

2001 292,704 -154,314 26,941

2002 404,321 -185,972 41,717

2003 520,070 -180,785 56,386

2004 698,185 -162,038 54,244

2005 985,605 -72,678 71,737

After analysing export and import performance, we consider net exports (Table 4.16). Figures reflect again the dominance of China in exports. Moreover, China has also shown a modest growth over the span of five years. As far as the performance of India is concerned, it has performed strongly as well with the volumes increasing over the years helped by good annual growth rates (Table 4.17). Since Korea has been a net importer of these products, we compare the growth rates for India and China. China has shown consistent growth over the years while India’s growth has been more sporadic and less consistent.



Table 4.17: Growth in Net Exports of India, China and Korea to the Rest of the World

Values in US$ '000 ITC codes: Glassware Product group 665

4.4 Competitiveness Analysis

Competitiveness is a comparative concept of the ability and performance of a firm, sub-

sector or country to sell and supply goods and/or services in a given market. According to

OECD, competitiveness is the degree to which a nation can, under free trade and fair market

conditions, produce goods and services which meet the test of international markets, while

simultaneously maintaining and expanding the real incomes of its people over the long term.

In recent years, the concept of national competitiveness has emerged as a new paradigm in

economic development. Competitiveness captures the awareness of both the limitations and

challenges posed by global competition, at a time when effective government action is

constrained by budgetary constraints and the private sector faces significant barriers for

competing in domestic and international markets. Competitiveness is important for any

economy that must rely on international trade to balance import of energy and raw materials.

National competitiveness is said to be particularly important for small open economies,

which rely on trade, and typically Foreign Direct Investment, to provide the scale necessary

for productivity increase which further improves the standard of living. But some authors like

Paul Krugman argue that "As a practical matter, however, the doctrine of 'competitiveness' is

flatly wrong. The world's leading nations are not, to any important degree, in economic

competition with each other." As Krugman notes, national economic welfare is determined

Year China India

2001

2002 38% 55%

2003 29% 35%

2004 34% -4%

2005 41% 32%



primarily by productivity in both traded and non-traded sectors of the economy and if the

concept of national competitiveness has any substantive meaning it must reside in the factors

about a nation that facilitate productivity.

In this section, we have analyzed the competitiveness of India compared to the competing

countries in terms of inter country trade. Table 4.18 presents inter country trade between

“India and China” and “India and Korea” and the trade ratios for the utensils sector. Trade

ratio represents the ratio of exports to the respective country to the imports from the same

country. If the ratio increases over time, it reflects that exports to the concerned country are

increasing at a greater pace than imports or declining at a slower pace than imports. The ratio

highlights the relative trade performance of the country vis-a-vis the concerned country over

the years. Trade ratios do not suggest any clear pattern of competitiveness in relation to both

China and Korea (Table 4.18).

Table 4.18: Exports and Imports of Utensils between India and China/Korea Values in US $ million

CHINA KOREA

Year Exports Imports Trade ratio (Exports/Imports) Exports Imports Trade ratio

(Exports/Imports)2003-04 0.42 0.03 14.00 0.11 0 2004-05 0.03 0.15 0.20 0.32 0 2005-06 0.18 0.17 1.06 0.23 0.01 23.00 2006-07 0.19 0.27 0.70 0.34 0 2007-08 0 0.68 0.00 0.42 0 Source: Trade statistics, www.commerce.nic.in In Table 4.19, we do a similar exercise for the cutlery sector. From this table it is quite

apparent that the trade ratio in case of China has been increasing for the period 2004-05 to

2007-08 reflecting increase in competitiveness while there is no clear pattern in case of

Korea as the trade ratios have been fluctuating heavily.



Table 4.19: Exports and Imports of Cutlery between India and China/Korea

HS Code: 82 Values in US $ million

CHINA KOREA


(Exports/Imports) 2003-04 1.3 14.24 0.09 1.27 7.42 0.17 2004-05 2.38 17.19 0.14 1.07 20.11 0.05 2005-06 2.81 24.52 0.11 1.82 37.18 0.05 2006-07 3.02 31.58 0.10 1.7 51.58 0.03 2007-08 4.37 47.93 0.09 2.54 25.69 0.10 Source: Trade statistics, www.commerce.nic.in

In Table 4.20, we carry out a similar exercise for the glassware sector. In case of china,

competitiveness has increased as reflected by the trade ratio but in terms of volumes, India’s

exports to China are far lesser than the imports from China. In the case of Korea, the

competitiveness seems to be declining over time as the trade ratio has been declining over the

years except in the year 2007-08.

Table 4.20: Exports and Imports of Glassware between India and China/Korea

HS Code: 70 Values in US $ million

CHINA KOREA


(Exports/Imports) 2003-04 2.57 34.85 0.07 2.09 6.34 0.33

2004-05 4.89 62.06 0.08 1.51 10.94 0.14

2005-06 9.2 86.78 0.11 1.76 18.8 0.09

2006-07 15.71 110.06 0.14 1.08 13.47 0.08

2007-08 29.48 146.28 0.20 1.41 9.37 0.15

Source: Trade statistics, www.commerce.nic.in



4.5 Conclusion

Keeping in view of the aspects emerged during competitive analysis in terms of India’s trade

with other countries, we perceive that there is a two way causality between productivity and

competitiveness. If a country is efficient and has advantage of productivity, only then it will

be competitive and if a country is competitive, it will be able to make gains in the

international markets through continuous upgradation of technology or manufacturing

techniques thus leading to increase in productivity.

In the Indian scenario, in the case of the utensils sector the capital productivity has increased

over the years as revealed by the ASI data, labor productivity has slightly declined and there

has not been much of technological growth. Although the computation of productivity is on

the basis of ASI data for the period 1999-00 to 2005-06 and the computation of

competitiveness is based on export-import data for the period 2003-04 to 2007-08, we can

get some idea about the patterns in productivity and competitiveness seen together. The mix

of movements in partial productivity of utensils sector was corresponded by unclear pattern

in competitiveness in this sector relative to China and Korea.

In the case of cutlery sector, though the capital productivity has shown rise, labor

productivity has declined and the technological growth has been negative and this scenario

has been corresponded by a decline in competitiveness relative to china and Korea.

Finally, in the third case of glassware sector, labor and capital productivity have risen over

time but the technological growth has been negative and this scenario was corresponded by at

least rise in competitiveness relative to china. Though the picture is not very clear, but there

is some sort of complementary relation between productivity and competitiveness as can be

observed in the case of glassware sector.



Chapter 5

Field Survey Findings

5.1 Profile of Utensils, Cutlery and Glassware Manufacturing Units

National Productivity Council has carried out a nationwide survey across various Utensils,

Cutlery and Glassware manufacturing units to find out the major constraints that are

hindering the growth of these manufacturing units in India in terms of productivity and

export competitiveness. The field survey has been carried out across nine states in India with

a view to provide sector specific policy recommendations for enhancing productivity and

export competitiveness of this sector in the country. While conducting the survey it was

found that majority of the Utensils, Cutlery & Kitchen tools and Glassware Manufacturing

Units operate in clusters.

The survey of the manufacturing units has been carried out with a structured questionnaire

(Annexure 1). The field survey captures firm level information such as turnover,

employment, domestic and foreign trade, product description, cost related information,

factors affecting productivity, factors responsible for competitiveness and specific

suggestions from each of the manufacturing units.

The field survey covers a total of 232 Utensils, Cutlery & Kitchen tools and Glassware

manufacturing units spread across 9 states in India (Annexure 1). Detailed state wise

distribution and products wise distribution of manufacturing units are given in Table 5.1 and

Fig 5.1.



Table 5.1: Distribution of Utensils, Cutlery and Glassware Products Manufacturing Units

States Utensils* Cutlery &

Kitchen Tools Glassware Total

Andhra Pradesh 7 -- -- 7

Delhi -- 1 -- 1

Gujarat 15 9 1 25

Haryana 41 2 -- 43

Maharashtra 15 11 -- 26

Rajasthan 22 8 -- 30

Tamil Nadu 5 1 1 7

Uttar Pradesh 14 1 26 41

West Bengal 39 -- 13 52

Total 158 33 41 232

*Utensils include 150 both manufacturing units producing only utensils as well as manufacturing units producing all utensils, cutlery & kitchen tools.

Source: NPC Field Survey, July-September 2009

Fig. 5.1 Distribution of Sample Utensils, Cutlery & Kitchen Tools and Glassware Products Manufacturing Units – NPC Field Survey

The establishment year for the surveyed units is reported between 1900 to 2007. As far as the

nature of business is concerned, 37% respondents belong to Proprietorship category, 34%

reported that they belong to private limited and remaining 29% belong to partnership. In



terms of the size of the company, 85% belong to small units while 9% belong to medium and

5% belong to informal sector. Only 11% reported that they have obtained quality

accreditations. This suggests that there is a need for establishing benchmarks for this

industry.

5.2 Employment Profile

It is visible from Fig. 5.2 that the average employment across the manufacturing units has

steadily increased from 15 employees in 1998-99 to 37 employees in 2008-09 which is a

good sign. Further, the 75% of the units have reported that less than 50% of their labor is

unskilled. This suggests a need for providing vocational training for producing skilled labour

for this sector.

Fig. 5.2 Average Employment per Unit



5.3 Trade Related Information

Fig. 5.3 reveals that only 5% of the surveyed

manufacturing units are engaged in export. Out of the

units engaged in the exports 86% of the manufacturing

units export 11-25% of their total production and 14%

exports only 1-10% (table 5.2).

Table 5.2 Percentage of exports to total sales

1-10% 1-25% Total

Respondents (%) 14 86 100

As regards to export growth during the last ten years, 14% units out of those engaged in

exports reported an increase, 82% reported a decline while 5% reported there is no growth in

exports (Table 5.3).

Table 5.3 Growth in export during the last ten years

Growth in Export Manufacturing Units Response (%)

Increased 14

Decreased 82

No Change 5

Total 100

As regards to the extent of increase in exports, 60% of the units reported increase in exports

and they reported that the extent of increase is in the range of 1-10% while 30% units

reported above 50% export growth during the last ten years (Table 5.4).

Fig. 5.3 Engagement in exports



Table 5.4 Extent of increase in exports during last ten years

Extent of Increase (%) Manufacturing Units Responses (%)

1-10 60

10-25 10

25-50 0.0

50 & Above 30

Total 100.0

As far as imports by utensils, cutlery and glassware manufacturing units are concerned, less

than 5% manufacturing units import raw materials to meet production requirements (Fig.

5.4).

Fig. 5.4 Engagement in imports

About 57% of the units engaged in imports reported that their imports are in the range of 1-10%

of their total sales, while 43% reported imports in the range of 10-25% of total sales (Table 5.5).

From a critical analysis of export and imports it can be concluded that the a large proportion

of the units engaged in the external trade in utensils, cutlery and glassware industry deal in

international markets as a complimentary activity and focus primarily on domestic markets.

Table 5.5 Level of import of raw materials for units’ Production requirement

1-10% 10-25% Total

Respondents (%)

57 43 100



5.4 Domestic market Related Information

Among the manufacturing units surveyed 39% of the

units reported to have domestic market share of 1-5%,

36% reported 6-10% domestic market share, 21%

reported 11-25% and remaining 4% reported having

domestic market share of 26% & above. (Table 5.6).

More than 80% of the manufacturing units surveyed,

reported domestic sales of more than 50% of total

sales and major contributors are again small and

medium sized units (Table 5.7).

Table 5.7: Share of Domestic sales to Total sales

1-10% 11-25% 26-50% 51% & Above Total

Respondents (%) 8 1 11 80 100

As far as the competition in the domestic market from local companies are concerned, around

52% respondent units reported moderate competition i.e. about 10-20 players competing with

the unit in the markets they are catering to, while 52% reported intense competition i.e. more than

20 players competing in that market and only 7% units reported no competition (Table 5.8).

Table 5.8 Extent of competition in the Domestic market from local companies

Intense Moderate Low No competition Total

Respondents (%) 31 52 10 7 100

From Table 5.8 it may be concluded that there is reasonable competition in domestic market

among indigenous manufacturing units and thus there exists an inherent incentive for them to

become more productive and competitive, if backed by Government support can produce

fruitful results.

Table 5.6 Domestic Market Share

Market Share Respondents (%)

1-5% 39

6-10% 36

11-25% 21

26% and above 4

Total 100



5.5 Factors responsible for competitiveness

87% of the surveyed manufacturing units

are not satisfied with the quality of

infrastructure in their states (Fig. 5.5).

Similarly, at the national level, more than

45% of the respondents feel that the

quality of infrastructure in India is poor

(Table 5.9) while only 35% respondents

feel that it is good in the competing

country (Table 5.10).

This clearly reflects the deplorable state of

infrastructure available to manufacturing

units in India as compared to the

competing countries.

In the case of Government’s interface with the business sector, about 62% of the respondents

reported that it is poor, 37% reported that the government’s interface with the business sector

is average (Table 5.11). This becomes even more apparent if we look at the clearance time to

start a manufacturing unit in India and in the competing countries. Around 70% of the

manufacturing units reported that it takes more than a year to get clearance to start a

Fig. 5.5 Infrastructure in the State

Table 5.9 Quality of basic infrastructure in India

Respondents (%)

Poor 45 Reasonable 36

Good 19

Total 100

Table 5.10 Quality of basic infrastructure in competing country

Respondents (%) Poor 11

Reasonable 45 Good 35

Excellent 7 Total 100



manufacturing unit in India (Table 5.12). While 56.8% report that it takes only about 3-5

months to get clearance to start a manufacturing unit in competing country (Table 5.13).

Table 5.11 Government’s interface with the business sector

Excellent Average Poor Total

Respondents (%) 1 37 62 100

Table 5.12 Clearance time to start a manufacturing unit in India

1-2 months

3-5 months

6-9 months

10-12 months

More than one year Total

Respondents (%) 3 4 11 12 70 100

Table 5.13 Clearance time to start a manufacturing unit in competing country

1-2 months

3-5 months

6-9 months

10-12 months

More than one

year Total

Respondents (%) 8.1 56.8 24.3 2.7 8.1 100

The abovementioned responses clearly indicate that the government’s efforts haven’t been

really paying off in creating a friendly environment to the business sector. A lot needs to be

done to reduce the inefficiency and time taken to give clearance to the investors starting new

manufacturing units.



5.6 Impact of Global Financial Crisis

Around 94% respondents reported that

their business was not affected by the

global financial crisis, clearly indicating

the essential commodity nature of the

products produced in this sector and less

dependence of the sector on exports (Fig.

5.6). This is good news for this sector but

it does not imply that the sector doesn’t

need any support to improve

competitiveness in international markets.

When asked about the expectation of fall in domestic business and export in the coming

years, 86% units expected a fall in domestic business and export in the coming years, while

14% held an optimistic view about the business in the coming years (Fig. 5.7). This reflects

the fear and apprehensions of the units that repercussions of the crisis may be felt in this

sector in the near future. Thus, there is a need to take confidence building measures to assure

investors of a profitable return to their investments.

Further, only 3% of the respondents reported to have made a strategy to counter the global

financial crisis (table 5.21). Some of the exporters specified their strategies as shifting

towards the domestic market, reduction in profit margin, cost cutting etc.

Fig. 5.6 Effect of Global Financial Crisis on the firm

Fig. 5.7 Expectation of a fall in Domestic Business and Export in the coming years

Fig. 5.8 Strategy to counter Global Financial Crisis



5.7 Major Findings from Field Survey

Based on the field investigations and discussion with various stake holders, the following

issues have been identified which affect the Competitiveness of Utensils, Cutlery and

Glassware products manufacturing in India.

• Global competition has intensified in the recent years.

• Increase in raw material price.

• Various Government trades and export policies have not been able to contribute

towards growth of the sector.

• Quality of product needs improvement.

• Inadequate supply of fuel.

• Hike in fuel cost.

• Competition from China.

• Dominance of small manufacturers.

• Interest rates are very high.

• Shortage of skilled manpower.

• Shortage of power supply.

• High Power & Water charges & Improper and irregular supply.

• Procedural delays in export clearance.

• High Import and excise duty cost.

• Labour problems in organized sector.

• Lack of market intelligence and market planning.

• Stringent Pollution Norms.

• Need to open outlets and showroom all over the country.

• Need to develop internationally recognizable brands.

• Sector is not affected by the global financial crisis.



Chapter 6

Summary of Diagnostic Case Studies 6.1 Introduction

This chapter provides summary of diagnostic case studies undertaken for Eight Utensils,

Cutlery and Glassware Manufacturing units with a view to understand unit specific

problems such as production, raw material availability, marketing, finance, productivity,

export competitiveness etc (Report II: Diagnostic Case Studies). The cities/states/clusters

covered for developing diagnostic case studies are Mumbai, Haryana, Uttar Pradesh, West

Bengal, Andhra Pradesh, Delhi and Tamilnadu.

For developing diagnostic case studies, a detailed case study format has been prepared

(Annexure 4). The format included questions regarding background of the company, present

status, objective, marketing, finance, technology, government policies and manufacturing

scenario over last few years etc., in order to get details regarding the unit and to assess the

productivity levels of the unit. Major findings of the diagnostic case studies are summarized

in this chapter.

6.2 Summary of Industry requirements: Utensils and Cutlery Sector

6.2.1 Dissolving Cartel of Raw material suppliers

Cutlery and Utensils manufacturers face frequent shortage of raw materials steel (patta) for

production. In the recent times an artificial shortage of steel (patta) was created by major

corporations. An organized Body is required to monitor and co-ordinate the raw material

requirement and to negotiate rates & supply of raw material to the manufacturers. Since the

requirements would be in bulk, quantities which would give the bargaining power to get

material at competitive price. This method of cooperative buying is followed by certain

countries very successfully.



6.2.2 Double Level Taxation in Uttar Pradesh, Andhra Pradesh

The partial treatment of state government (Uttar Pradesh, Andhra Pradesh) in taxes like anti-

tax on buying raw material from outside the state, stock transfer tax, etc., has been increasing

the prices of the raw material and thus cost of production. This partial taxation system needs

to be reformed.

6.2.3 Relocation of units due to urbanization/residential inhabitation and strict

environment regulations

The cost of relocation (shifting cost + operations starting costs) puts an extra financial

burden. The Government should allot adequate space, plots and provide monetary support if

such relocation is to be done.

6.2.4 Adequate Infrastructural Resources

Power crisis is to be solved to ensure un- interrupted power supply. Road transport facility

needs improvement.

6.2.5 Waste minimization and Profitability

Low margins or profitability is a major concern for the firms in this industry. During the

process of manufacturing a lot of steel becomes scrap. And the low price of this scrap

increases the cost of raw material (steel) and thus shrinking profitability. Government should

provide either waste minimization training or increase the steel scrap value.

6.2.6 Ban on Anti Dumping Duty on Raw Material in Maharashtra and Tamilnadu

The basic raw material used for the manufacturing of utensils, cutlery and kitchen tools is flat

stainless steel. On the raw material (flat stainless steel) “Anti Dumping Duty” has been

imposed by the Maharashtra Government. For example in the open market the raw material

was available about Rs. 120/- per Kg. but by imposing the “Anti Dumping Duty” which is

Rs.80/- per Kg the prices of the raw materials (flat stainless steel) have gone up by almost

30% higher within the last three months. This is hampering the cost competitiveness of the

sector.



6.2.7 Environment Norms and Regulations in Delhi

Re- rolled steel is manufactured through rolling process and that process involves pickling

process. This combined process is called as “Stainless Steel Pickling.” During this process

acid is evolved. This acid is neutralized by mixing alkali (caustic soda) in it. New Delhi

Pollution Control Committee, Department of Environment, Govt. of NCT of Delhi has issued

a notice saying, ”It is hereby directed that all such units, engaged in the activities falling

under prohibited/ negative list shall stop their activities and relocate themselves outside Delhi

on or before 6th February 2010, without fail. Failure to do so will invite strong regulatory

action as per provision of Air (Prevention and control of Pollution) Act, 1981 and Water

(Prevention & Control of Pollution) Act, 1974”. If these manufacturing units which are

engaged in the production of patti-patta are closed against the above notice then not only

these units will be affected but those units which are engaged in the manufacturing of

utensils, cutlery and kitchen tools will also be closed down.

Although the pollution created by the pickling process is neutralized by mixing alkali in it,

but even then the Government does not agree with it, then the time period of minimum of

two years may be given to these units and the alternate site may be allotted to these units. If

this problem is not taken seriously, then the Indian market will be flooded with China made

utensils, cutlery and kitchen tools.

6.2.8 Cluster Development

Although various clusters already exist in this sector but they need to be strengthened.

Special attention needs to be provided to these clusters in order to ensure further growth in

these sectors. Also there is a need to develop and strengthen the existing cluster at Kundli,

Sonipat.

6.2.9 Fluctuations in steel prices: Fluctuation in steel prices sometimes cause loss to the

units. Monitoring agency should be constituted for regulation of the process.



6.3 Summary of Industry Requirements: Glassware Sector

6.3.1 Dissolving Cartel of Raw material suppliers

Soda ash is one of the important raw materials for the industry and the cartel formed by three

major corporations providing this raw material reduces the cost competitiveness of the

industry as compared to the competing countries.

6.3.2 Reduction in Excise Duty

The excise duties should be reformulated on the basis of compound taxation.

6.3.4 Labour Reforms

Although labour is available in this sector, it is the permanency of labour according to old

labour laws which are affecting the working of the sector. Thus to make the sector efficient

and competitive labour laws should be made flexible.

6.3.5 Supply Chain inefficiency in Uttar Pradesh- A bottleneck

Silica, Lime-Soda, Soda ash and Natural Gas are used as an input for Glassware industry.

Silica shares about 5% of total cost and Soda part nearly 25% of total cost. Natural gas is

mainly used for the burning purpose. All kinds of raw material cost near about 35% of total

cost. Soda-ash is the main input for the final product of industry, and it is used near about 80

tonnes per day and 35000 tonnes annually. Soda-Ash is imported from Kenya. The uploading

of Soda-Ash for the sector from Kenya to the Nhava Sheva port located in Mumbai, takes 15-

30 days delay which is a major bottleneck in supply chain. This problem affects the cost of

production and the prices of the final output. If this problem is solved then it will improve the

productivity and efficiency of the sector to a large extent.

6.3.6 Adequate Infrastructural Resources

Power crisis is to be solved to ensure un- interrupted power supply. Road transport facility

needs improvement.



Chapter 7

SWOT Analysis of Utensils, Cutlery and Glassware Sector

7.1 SWOT Analysis of Cutlery Sector

STRENGTHS

Cutlery sector is one of the fastest growing sectors and the increasing demand for

its various products throughout the world makes it all the more lucrative. Cutlery is no more ‘just cutlery’, it has become a symbol of aesthetics, status as

well as it denotes taste. Brands like Art D’nox, Magppie, Awkenox, etc. are some of the best known

brands in Indian market which have entered in the niche segment of cutlery,

which is an indicator of its high potential in the market. Although most of the Indian Cutlery manufacturers are mainly of Micro, Small

and Medium Enterprise (MSME) category but it has high potential of meeting

customer-specific demands in the market. Indian Cutlery sector is capable of catering to customized demand arising in

several hotel chains which is not feasible for countries engaged in bulk production

& supply. It makes India a very strong potential contender in a niche segment of

the international market. Availability of cheap labour and raw material can allow India to become a major

global player in this segment.



WEAKNESS

During the “Forging” process much of the raw material is wasted.

Many of the steps involved in manufacturing process are manual, which affects the

finishing of the final product. It also acts as a hurdle in establishing benchmarks.

Efficiency of production is only about 50% (in terms of usage of raw material).

Lack of fully automatic production lines.

Lack of products with good brand value and global recognition of Indian Brands.

No relevant and freely available study or data exists which explores the potential of

this industry in terms of demand, marketing, production and potential, as a result it

becomes difficult to visualize the right global perspective.

The SME sector of this industry still does not employ technically qualified personnel

with a global perspective involved in production, designing, distribution, marketing

or advertising of its products.

Economies of scale have not been achieved.

No consolidation of SMEs.

The SME sector still does not follow Good Manufacturing Practices (GMP) and

quality control norms.

Domestic market for cutlery is still unexplored.

There are no benchmarks and standards set for this industry thereby making products

highly variable in quality, design and finish.

Steel prices are regulated by the government, but, the prices of re-rolled sheets of

steels used for forging cutlery are not governed, thereby exposing the production cost

to fluctuations and instability.

Presence of multi-tier procurement and distribution channel increases price of raw

material as well as of finished product reaching customer.

Cost Incompetitiveness

Not many courses as well as trained personnel to design and produce good cutlery are

available.

Lack of creativity in the field.



OPPORTUNITIES

Changing eating as well as serving habits amongst people is leading to an increasing

growth in the cutlery market, thereby opening newer markets.

The demands in existing markets are increasing everyday due to demand for newer

products, designs and variety.

Innovations in designs and variety are being eagerly received by customers, who do

not even mind paying more for ‘different’, ‘latest’, ‘trendy’ and ‘fashionable’. This

trend also creates an ever-growing demand even in saturated markets.

Indian domestic market has huge untapped potential.

India has the potential to cater to a niche, high revenue market for producing very

high quality and standard products.

India can outsource its production capacity to well established brands globally.

THREATS China and Japan with their superior quality, better finish and cheaper cost are a major

threat to the growth of domestic industry.

Anti dumping duties on finished steel and high taxes on imports of raw material.

Prospect of imposition of heavy duties and taxes by Indian government on cutlery

goods.

Intra-industry competition.

Big players with huge revenues and bigger budgets can outperform the smaller but

major players (SMEs).

Intellectual property issues related to design and processing of products.

Unawareness amongst people about the usage of cutlery and its potential as a

profitable business/employment opportunity.

Use of harmful chemicals and too much reliance on unprotected working

environment leading to high attrition rates as well as casualty amongst workers.



7.2 SWOT Analysis of Utensils Sector

STRENGTHS

• Easy availability of raw material.

• Availability of labour.

• Training of labour for creating

skilled manpower is easy.

• Strong emergence of demand on

domestic front.

• Capabilities to fulfill customized

demand in market as most of the

manufacturing units are Small

Scale Units.

WEAKNESSES

• Non-existence of reliable distribution

channel.

• Inadequate R&D investment.

• Many steps involved in the

manufacturing process are manual, which

affects the finishing of the final product.

It also acts as a hurdle in standardization.

• Lack of automation.

• Lack of products with good brand value

and Global un-recognition of Indian

Brands

• There are no benchmarks and standards

set for this industry thereby making

products highly variable in quality,

design and finish.



OPPORTUNITIES

• Export potential due to price

competitiveness.

• The demands in already existing

markets are increasing everyday due

to demand for newer products,

designs and variety.

• Innovations in designs and variety are

being eagerly received by customers,

who do not even mind paying more

for ‘different’, ‘latest’, ‘trendy’ and

‘fashionable’. This trend also creates

an ever-growing demand even in

saturated markets.

THREATS

• Nickel prices volatility: non-

affordability for industrial use.

• Protectionist trends in developed

countries.



7. 3. SWOT Analysis of Glassware Sector

STRENGTHS

• Availability of raw materials within the

country

• Ever increasing market demand.

• Better quality products being

manufactured as compared to

competing countries

• Latest technologies being used

• Labour Intensive

• Glassware industry is driven by user

segment manufacturing chemicals, food

etc. Thus, this segment is highly

competitive, demanding and well

integrated with global trends.

• Decades of experience with many of

the existing firms

WEAKNESSES

• Glassware sector is highly energy

intensive. So energy consumption is a

major cost driver. Energy cost includes

power consumption and running cost of

furnaces.

• Safety and environmental factors are

also important factors of cost in this

sector.

• Shortage of electricity in the major

clusters like Firozabad.

• Low labor productivity as compared to

competing countries like China

• Higher taxes as compared to competing

countries

• Lack of financial support for working

capital requirements.



OPPORTUNITIES

• Changing customer preferences keep

the industry growing. This favours

positive growth of industry

• Glassware serves as best option for

packaging industry, especially for food

products due to inert properties of glass.

• Huge potential in the domestic market

especially for kitchenware as the

lifestyles are becoming more modern

• Scope of growth in exports due to better

quality being offered by domestic

manufacturers and reputation of the

firms

THREATS

• Cost incompetitiveness

• Shortage of natural gas i.e. the main fuel

for heating the furnace

• Cartelization of the three major

companies supplying soda ash, thus

leading costs escalations.

• Low price Chinese products available in

India are causing production of some

products like chandeliers unviable.



Chapter 8

Harmful Aspects of Non-Stick Cookware

8.1. Introduction

With the changing lifestyles, people are always looking to save their time and manage it

better. For some people, it's less about the time it takes to cook food and more about the time

it takes to clean up. Nonstick cookware offers a good solution to that problem. Nonstick

cookware lets people fry, sauté, stew and bake with less mess and less fat. This kitchen

convenience offers an alternative to hours of scrubbing the remains of a grilled cheese

sandwich or pancake batter from the inside of a pan. But question about the safety about non-

stick cookware has always been in question.

There are some harmful aspects of nonstick cookware usage which intrudes into the food due

to the usage of Per-Floro-Octanoic Acid (PFOA), also known as C-8—a chemical used to

bond the nonstick coating to the pan, in the manufacturing of the nonstick cookware.

8.2. Non stick cookware products

Non stick tawa

Non stick fry pans

Non stick scoops

Non stick casseroles

Non stick plain pan

Non stick hamburger pan

Non stick sandwich pan

Non stick toast pan with lid

Non stick perforated pan

Non stick pitta bread pan

Non stick cracker pan etc.



8.3. Harmful Effects of Non-Stick Coatings

Nonstick coatings are applied to metal utensils to prevent food from sticking and to protect

cookware surfaces. In early 2006 the Environmental Protection Agency (EPA) had asked

eight American companies, including DuPont, maker of Teflon-brand nonstick cookware, to

work towards the elimination of PFOA—which they labeled a likely carcinogen. PFOA has

been shown to cause cancer, low birth weight and a suppressed immune system in laboratory

animals exposed to high doses of PFOA. PFOA causes four types of tumors in rats: liver,

pancreas, mammary gland (breast) and testes. PFOA also decreases thyroid hormone levels, a

known risk factor for impaired brain development, and delays sexual maturation in

laboratory animals. PFOA is especially toxic to the young because it kills young rats at doses

that do not kill parental animals.

Industry scientists estimate that it takes 4.4 years for people to eliminate just half the amount

of PFOA found in their bodies. Studies have shown the chemical to be present at low levels

in the bloodstream of 9 out of 10 Americans, and in the blood of most newborns. And

although the effects of PFOA at lower doses in humans are disputed, there does seem to be a

link between PFOA and raised levels of cholesterol. More seriously, some people have

claimed that PFOA exposure caused birth defects in babies born to mothers working at a

Teflon plant in the early 1980s. However the transmission of chemical to humans is unclear,

and, thus far, there’s no evidence that nonstick cookware in particular is to be blamed.

But there is a dispute about the usage of non-stick cookware at certain temperatures—hotter

than the smoke point of cooking oils or the point where food is burned—the nonstick coating

will break down and release toxic fumes. Any surface that’s subject to extreme temperature

will give off toxic gases. According to DuPont, cookware with Teflon nonstick coating has a

recommended maximum use temperature of 500 degrees Fahrenheit and that significant

decomposition of the coating will occur only when temperatures exceed about 660 degrees

Fahrenheit, which could easily happen if nonstick pans were left dry or empty on a hot

burner.

When used responsibly, nonstick cookware poses no threat to people or animals and can be a

useful component to a healthy and well-balanced diet



8.4 Stick with Nonstick

There are two issues here: 1) whether PFOA is present in nonstick cookware, and 2) the

emission of PFOA into the environment. As far as cookware is concerned, there seems little

reason to toss nonstick cookware products just yet. Under normal use, the pans are almost

certainly safe. Appropriate action needs to be taken to ensure that emissions of PFOA will be

all but eliminated within 10 years and suitable alternatives need to be looked upon. The

companies are even in the process of replacing these chemicals with shorter chain fluoro

chemicals that perform just as well but appear to be safer. Although these new ingredients are

considered sound replacements, they may only be a temporary fix, pending development of a

new generation of less toxic substitutes.

8.5 Alternatives to Nonstick Cookware Technology

Some types of cookware that might be considered in place of nonstick include anodized

aluminum, which does not react with ingredients; enameled or regular cast iron ; glass and

stainless steel.

8.5.1. New Nonstick Technologies

Silicone can become a floppy muffin tin or a nonstick coating for a metal pan. Thermolon, a

ceramic nonstick coating. The coating is mostly composed of silicon and oxygen. Thermolon

has a number of different formulations of its coating for specific nonstick cookware needs.

Other silicone based technologies are also available.

8.5.2. Stainless Steel Cookware

Stainless steel, a mixture of several different metals, including nickel, chromium and

molybdenum, all of which can trickle into foods. However, unless stainless steel cookware is

dinged and pitted, the amount of metals likely to get into food is negligible.



8.5.3. Anodized Aluminum Cookware

The electro-chemical anodizing process locks in the cookware’s base metal, aluminum, so

that it can’t get into food, and makes for what many cooks consider an ideal non-stick and

scratch-resistant cooking surface.

8.5.4. Cast Iron Cookware

Cast iron, known for its durability and even heat distribution can also help ensure that eaters

get enough iron—which the body needs to produce red blood cells—as it seeps off the

cookware into food in small amounts

8.5.5. Ceramic Cookware

Ceramic Cookware with the feel and heat distribution properties of cast iron is dishwasher-

friendly and somewhat non-stick, and covers the entire surface of such cookware to minimize

clean-up headaches.

8.5.6. Copper Cookware

Copper Cookware, favored by chefs for sauces and sautés excels at quick warm-ups and even

heat distribution. Since copper can leak into food in large amounts when heated, the cooking

surfaces are usually lined with tin or stainless steel.



Chapter 9

Impact of Globalization on Utensils, Cutlery and Glassware Sector

9.1 Background

India’s transition to liberalization and globalization has been nothing short of remarkable.

However, even after 17 years since this process initiated, India remains characterized by vast

inequalities in wealth, economic power and incomes. To overcome these inequalities,

government is geared towards reviving industrial growth in a global context and moving

towards the bigger goal of overall development of the country. The Indian economy, before

1990s was characterized by low rates of economic growth and employment. The Indian state

historically may be described as highly interventionist. The state has regulated the economic

sphere prior to 1991 and the state’s priorities were maintaining an economy based on

socialist philosophy, while the focus has changed to integration with the world since 1991. In

this chapter, we study the process of liberalization and globalization in India and its impact

on the Utensils, Cutlery and Glassware sector which are the focus of this study. The

globalization process has left a mixed impact on these sectors so far with India gaining in the

production of some products and losing in others.

According to the theory of comparative advantage, in a globalised world countries will

produce and export the products in which they have a comparative advantage and rely on

imports for products in which they don’t have a comparative advantage. Since these

industries are labor intensive and India has abundant labor available at very low prices as

compared to international levels, it could be expected that these industries would gain from

the opening up of the Indian economy. The expectations have been partly met and a lot is to

be achieved.

If we consider the utensils sector, we find that exports have been rising over the year,

especially since 2003 from US $ 31.6 million to US $ 131.9 million in 2007-08. Though the

imports for the sector have also been rising, they are much smaller in comparison to exports

and India stands to gain on the whole. Similar is the case with the cutlery sector, where in

exports have been increasing over the last decade and imports have copied the pattern. Till



now, the net exports have been positive and India has made gains in this sector. But there is

tough competition from some countries which are highly efficient and competitive. As far as

the glassware sector is concerned, the gains have been on the side of manufacturing of items

like containers, glasses, tumblers etc., while the industry had to face losses on the

manufacturing of items like chandeliers. The impact of low priced chandeliers imported from

China has been such that the Indian manufacturers in one of the biggest clusters of glassware

in India, Firozabad, have to stop manufacturing the chandeliers.

Besides the reduction in duties and tariffs, countries all over the world have been engaging in

free trade agreements with specific countries to promote the duty free trade of goods and

services between the concerned parties according to the terms and conditions of the

agreement. A free trade agreement (FTA) is a trade treaty between two or more countries.

Usually these agreements are between two countries and are meant to reduce or completely

remove tariffs to trade. According to the World Trade Organization there are more than 200

FTAs in force. India has also signed free trade agreements (list given below) in the recent

past like SAFTA, India-Korea agreement, India-ASEAN agreement etc.. A brief look at

some of the important agreements is given below:

Agreement on South Asia Free Trade Area SAFTA

Asia Pacific Trade Agreement APTA

CECA between The Republic of India and the Republic of Singapore

Global System of Trade Preferences GSTP

India Chile PTA

India Afghanistan PTA

India ASEAN Agreements

India Bhutan Trade Agreement

India Korea CEPA

India MERCOSUR PTA

India Nepal Trade Treaty

India Sri Lanka FTA



9.2 Agreement on South Asia Free Trade Area (SAFTA)

The Agreement on South Asian Free Trade Area (SAFTA) came into force from 1st January,

2006. India, Pakistan and Sri Lanka are categorized as Non-Least Developed Contracting

States (NLDCS) and Bangladesh, Bhutan, Maldives and Nepal are categorized as Least

Developed Contracting States (LDCS).

Afghanistan which became the eighth member of SAARC during the 14th SAARC Summit

held on 3-4 April 2007 in New Delhi is due to become a party to the SAFTA Agreement as

an LDC member. Article 7 of the SAFTA Agreement provides for a phased tariff

liberalization programme (TLP) under which, in two years, NLDCS would bring down tariffs

to 20%, while LDCS will bring them down to 30%. Non-LDCS will then bring down tariffs

from 20% to 0-5% in 5 years (Sri Lanka 6 years), while LDCS will do so in 8 years. NLDCs

will reduce their tariffs for L.D.C. products to 0-5% in 3 years. This TLP would cover all

tariff lines except those kept in the sensitive list (negative list) by the member states. The

salient features of the four Annexes of SAFTA Agreement are as under:

i. Rules of Origin:

a. For giving preferential access to the Member Countries under SAFTA, the goods shall

have undergone substantial manufacturing process in the exporting countries. The substantial

manufacturing process are defined in terms of twin criteria of Change of Tariff Heading

(CTH) at four-digit Harmonized Coding System (HS) and value content of 40% (30% for

LDCSs).

b. Apart from the general rules, to provide for Products-Specific Rules (PSR) for 191 tariff

lines to accommodate the interest of LDCSs given their limited base for natural resources and

undiversified industrial structure. The Products Specific Rules have been provided clearly on

technical grounds i.e. where both inputs and outputs are at the same four-digit HS level.



ii. Sensitive List: The summary of the Sensitive Lists are as under:

iii. Mechanism for Compensation of Revenue Loss (MCRL) for the Least Developed

Contracting States:

a. The compensation to LDCSs, except to Maldives, would be available for four years; to

Maldives it would be for six years. The MCRL to Afghanistan, which is due to become a

party to the SAFTA, will also be at par with Maldives.

b. The compensation would be in the form of grant in US dollar.

c. The compensation shall be subject to a cap of 1%, 1%, 5% and 3% of customs revenue

collected on non sensitive items under bilateral trade in the base year, i.e., average of 2004

and 2005. The compensation shall be administered by the SAFTA Committee of Experts as

per the Administrative Arrangements defined in this Annex.

iv. Technical Assistance to Least Developed Contracting States in agreed areas. The

main areas covered are - capacity building in standards, product certification, training of

human resources, data management, institutional upgradations, improvement of legal systems

and administration, customs procedures and trade facilitation, market development and

promotion.



9.3 fINDIA-ASEAN Free Trade Agreement

The India-ASEAN Free Trade Agreement (FTA) was finally signed, on 13 August 2009 at

Bangkok, after six years of negotiations, on the sidelines of meeting of Economic Ministers

of ASEAN. The agreement was only for trade-in-goods Negotiations for agreements on

services and investment sectors have commenced only in October 2008 and are expected to

be completed by December 2009.

The FTA will be effective from January 1, 2010. The FTA would eliminate tariffs for about

4000 products out of which duties for 3200 products will be reduced by December 2013,

while duties on the remaining 800 products will be brought down to zero or near zero levels

by December 2016. A number of utensils, cutlery and glassware product segments have also

been included in the free trade commodity category. The products are given in table 9.1

Table 9.1 INDIA'S REVISED OFFER LIST FOR ASEAN UNDER AI-FTA dated 7th Feb 2008

Sl. No. HS Code Description Tariffs

2007-08

Offered

under

2336 732399 Other Household Utensils & Its

Parts 10 NT-1

2578 821490 Other Articles of Cutlery 10 NT-1

1978 701310 Glassware of Glass Ceramics 10 NT-1

1980 701331 Glassware of Lead crystal used

for table/kitchen purposes 10 NT-1

1982 701391 Other glassware of Lead crystal 10 NT-1

The 489 items excluded from the list of tariff concessions and 590 items excluded from the

list of tariff eliminations in the agreement pertain to farm products, automobiles, certain auto-

parts, machinery, chemicals, crude and textile products. Tariff cuts in respect of some

sensitive items like palm oil, tea, coffee and pepper will be graduated during a period of 10

years.



ASEAN is India’s fourth-largest trading partner after the E.U., the United States and China.

Two-way trade between India and ASEAN was $ 47 billion in 2008. Both the parties to the

FTA are expecting a $10 billion increase in trade even in the first year. India’s trade with

ASEAN is mainly concentrated in Singapore, Malaysia and Thailand. Singapore continues

to remain the largest market in ASEAN for India’s merchandise exports.

This agreement opens a 1.7 billion consumer market to the member countries with a

combined GDP of $ 2.3 trillion. The likely beneficiaries in India are the exporters of

machinery, steel, oilcake, wheat, buffalo meat, auto components synthetic textiles, refined

petroleum products, organic chemicals, pharmaceuticals, gems and jewellery.

9.4 Impact of free Trade Agreements on Utensils, Cutlery and Glassware Sector:

Items of these three sectors have been included in most of these agreements and since most

of these agreements are very recent, it’s not easy to judge their impact on the performance of

these sectors till now based on past data. But it is expected that due to these free trade

agreements, Indian manufacturers are likely to gain in these three sectors. For example, in

the India-ASEAN agreement, exporters of steel and other metal utensils are expected to

benefit from the agreement. And in the India-Korea agreements products of all these three

sectors have been put in India's schedule of tariff concessions. More specifically, glassware

has been put into E-8 category with a base rate of concession of 7.5%, utensils has been put

into E-8 category with a base rate of concession of 12.5% and cutlery into E-8 category with

a base rate of concession of 12.5% as well. And duties will be completely phased out for

these products within 7 years following the date of entry into force. So, there exists a huge

potential for exports and a lot of benefits can be derived by the manufacturers of these

products if they offer best deals at internationally competitive prices. To be competitive at

the international stage, they will have to be efficient as there is no place for weaker souls in

the tough international competition. some units or/and manufacturers of specific products

will find it difficult to survive in the free trade era and may have to switch to new products,

but on the whole for the industry, gains are expected to be positive.



Chapter 10

Summary & Recommendations

10.1 Introduction

All policy recommendations suggested in this chapter are formulated after having detailed

discussions with the industry associations and manufacturing units from different clusters

across India and also based on case studies of manufacturing units from different product

categories.

During the course of the study, NPC study team had several rounds of detailed discussions

and interactions with Industry Association and Manufacturing Units

Meetings with Industry Associations and their views are given in Annexure 5.

Draft Recommendations prepared by NPC have also been discussed during a the

Round Table Conference held in Delhi where in various Industry Associations and

Leading Manufacturers participated. Minutes of the Round Table Conference is given

in Annexure 6.

10.2 Summary of findings


India is one of the huge markets of utensils in the world comprising of many Indian

manufacturers, exporters and suppliers of cook wares. The major clusters of utensils

manufacturing are in Jagadhari (Haryana), Bhayander/Mumbai (Maharashtra), Bankura

(West Bengal), Mirzapur (U.P), Odhav (Gujarat), Chennai (Tamil Nadu) and Hyderabad

(A.P). Most of the units in this sector are small scale and thus possess the capabilities to

fulfill the customized demand in the market. According to trade statistics provided by

Ministry Of Commerce, Government of India, the exports from the sector is to the tune of US

$131.9 million (i.e approximately Rs. 620 Crores) in 2007-08. There exists a huge export

potential due to price competitiveness. There has been a strong emergence of demand on the

domestic front. The sector is blessed with easy availability of labour and raw materials and

the training of labor for creating skilled manpower is also easy. But the sector also suffers



from the problems of low R&D investment, lack of automation, absence of big recognizable

brands in the international market.

10.2.2 Cutlery Sector Cutlery sector is one of the fastest growing sectors and the increasing demand for its various

products throughout the world makes it all the more lucrative. Cutlery is no more ‘just

utensils’, it has become a symbol of aesthetics, status as well as it denotes tastes. The main

clusters of this sector are in Delhi and Mumbai/Pune (Maharashtra). Although most of units

in this industry belong to Micro, Small and Medium Enterprise (MSME) category , it has

more scope for fulfilling customer-oriented demands in the market. It is capable of serving

customized demand arising from several hotel chains or for a particular demand/design,

which cannot be catered to by countries engaged in bulk production & supply. Capability to

produce customized cutlery products makes India a very strong potential contender in the

niche segment of the international market. Availability of cheap labour and raw material can

allow India to become a major global player in this segment. India can also outsource its

production capacity to well established brands globally. But this sector is also facing some

challenges like lack of efficiency, huge amount of wastage, tough competition from the

competing countries.


The glassware sector in India is quite old and well established and it has been growing over

the years. The glass industry is labour intensive and provides both direct (manufacture of

glass) as well as indirect (mining and transport of raw materials) employment. Glass in the

form of containers like jars, bottles, etc., plays an important role in packaging industry

globally. The glass containers remain in demand always and have etablished itself in the

market in a way that its demand is increasing with time. The industry enjoys the Availability

of raw materials within the country and latest technologies are being used to match up with

the international standards. The industry has a huge potential in the domestic market

especially for kitchenware as the lifestyle is changing. There exists a scope for growth of

exports because of better quality being offered and established reputation of the firms. In

order to harness these opportunities and potential, the sector will have to overcome the



challenges it is facing like shortage of natural gas i.e., the main fuel for heating the furnace,

competition from Low price Chinese products, Cartelization of the companies supplying soda

ash (one of the main raw materials) etc.

10.3 Recommendations

10.3.1 Recommendation Common to Utensils, Cutlery and Glassware Sectors (a) Awareness about Schemes

Many units from utensils, cutlery and glassware sector, including the medium sized firms are

unaware about many of the schemes available for MSME. Further they claim that they are

not informed about the new schemes launched and facilities available to them. So,

government needs to rethink about its awareness and communication strategy. Therefore it is

recommended that along with the traditional measures of giving advertisements in the

national dailies and talking to industry associations, government can send small postcards or

short letters and through emails informing them about the new schemes that are launched

from time to time. The finance for this exercise can come from reducing the number of

advertisements given in the newspapers and electronic media. Also, a strategy should be

made to utilize the new mode of media like internet to create awareness.

(b) It was suggested by the Industry Associations that enough time (one month) should be

given by Government before the implementation of new or change in taxation schemes, so

that necessary changes in software could be made.

(c) Data Availability: In order to compete with other countries, one needs to understand the

dynamics of this industry locally and globally. No relevant and freely available data exists

which explores the potential of this industry in terms of demand, marketing, production and

potential, as a result it becomes difficult to place this industry in the right global perspective.

So, the government needs to build some databases specifically for the industry.



10.3.2 Recommendations Common for Utensils and Cutlery Sector

(a) Recognition of Existing Clusters and Cluster Development

Various clusters already exist in India, manufacturing Utensils and cutlery. Some special

attention needs to be provided to these clusters in order to ensure further growth in these

sectors:

• A government operated Research and Development Centre should be opened in each

cluster to study and evolve new and better design of Utensils that can save fuel on

cooking, can be easier for storage and transportation, have better aesthetic appeal etc.

• A single window clearances for all government formalities like electrical

connections. Pollution clearances, bank loans etc.

• A cluster central office that will house the above and shall also be a head quarter

and meeting point for central cluster committee to monitor the progress of the

cluster. This committee should comprise of Industrialists and Government

officials. • Manufacturing of Utensils and cutlery is highly extensive operation as the base

raw material is highly priced. The main hindrance in the further growth of this

industry is the requirement of capital. To encourage the industry to further

increase its productivity levels, bank loan for working capital should be made

available to those in the cluster at a subsidized rate of interest. • Capital required at lower rate of interest. for Research and Development,

technology up gradation etc..

(b) Research & Development

Since most of the units in this sector are of small scale, it is not easy for them to make

investments in research and development. So, the government through its research institutes

should carry on the R&D to bring in new designs for utensils that are aesthetically appealing

and energy efficient especially when our population is increasing and energy resources

depleting at a quick pace.



(c) Branding

Even after having so many manufacturing clusters across the country producing good quality

products, this sector lacks existence of good brands which are internationally recognizable.

Government needs to give incentives to the manufacturing units in this sector to create their

own brands and get them registered with the government. The incentives can be in the form

of waiver of registration fees for some period of time and ease of procedures for registration.

Further, the list of registered brands should be available on the concerned government

websites in order to provide the public and foreign buyers a quick access to the good branded

products available in this sector.

(d) Automation

A number of steps are involved in the manufacturing process of utensils and cutlery products

of which many are manual, which affects the finishing of the final products. It acts as a

hurdle in standardization of quality. Many manufacturing units are in need of financial help

to introduce automation hence Government has to evolve schemes to finance technological

upgradation of the manufacturing units.

(e) International Trade and Free Trade Agreements

Some developed countries are following protectionist trade policies which are creating

uncertainty and confusion in the minds of the investors to pursue aggressively to increase

their capacity and take other measures like high quality standards as they will prove to be a

costly affair if they are not able to export to foreign markets. Governmental intervention is

required to address this issue while dealing with WTO. Further, many countries are engaging

in free trade agreements which may give the competing countries an advantage over the

Indian products.



(f) Relocation of units due to urbanization/residential inhabitation and strict

environment regulations

Relocation of the manufacturing units are becoming threat for many units. The master plan

envisages that all industries should be shifted away from the town, but no space has been

identified in master plan for relocation of the industry. Many units in places like Delhi,

Hyderabad and Jagadhri are facing a threat of closure due to the notices issued to them by the

respective state governments to relocate their units out of the city perimeter due to the

increasing pollution concerns but they haven’t been given enough land for relocation of the

units. Also, some of the small units are unable to buy new land and premises for relocation.

In such cases industries should not be relocated but a new township could be developed

somewhere near the town to cater to the residential requirements with complete pollution free

green environment. In major cities where relocation is necessary land and cost of relocation

of the industry should be borne by the Government. Therefore, it is recommended that

government should offer some compensatory schemes to help these units to relocate out of

the city.

(g) Goods and Services Tax (GST)

The Government of India has announced that it shall be imposing GST from September

2010. Since utensils are as necessary as food grains, it is recommended that it may be

included in the lower tax category in GST.

(h) Regional Physical Policy Structure

For a fair competition of the industry, subsidy and taxes should be at par with the

neighbouring states within India. As it has been reported that the variations in tax rates are

forcing industrialists to relocate the manufacturing units to other states. The utensils

manufacturing units in Jagadhri (Haryana) cluster should get the same tax benefits available

for the units located in neighbouring states of Uttarakhand and Himachal Pradesh.



(i) Dissolving Raw material suppliers cartel

It has been reported that Cutlery and Utensils manufacturers face frequent shortage of raw

materials particularly steel (patta) for production. In the recent years artificial shortage of

steel (patta) was created by major suppliers. An organized Body is required to look into the

raw material requirement aspect and to negotiate rates & supply of raw material to the

manufacturers on behalf of the sector. Since the requirements would be in bulk there exists

substantial bargaining power to get material at competitive prices. This method of

cooperative buying of raw material is followed by certain countries very successfully.

(j) Double Level Taxation in Uttar Pradesh and Andhra Pradesh

Preferential treatment of state governments (Uttar Pradesh, Andhra Pradesh) in taxes like

anti-tax on buying raw material from outside the state, stock transfer tax, etc., has been

increasing the prices of the raw material and thus cost of production. This partial taxation

system needs to be reformed for the larger interest of manufacturers in India with a view to

reduce cost of production and international competitiveness.

(k) Adequate Infrastructural Facilities

Infrastructure facilities are the main concern of manufacturers of the sector. Only allotment

of plots is not sufficient. Since the sector requires the supply of Electricity and Natural Gas

for various operations, availability of Electricity and Natural Gas needs to be ensured for the

development of the clusters. Power crisis need to be solved urgently and ensure un-

interrupted power supply. Road transport facility needs substantial improvement.

(l) Training and Skill Development

The cutlery and utensils manufacturing sector is labour intensive and are dominated by small

and medium enterprises. It has been observed that this sector is facing acute shortage of

skilled labour. It is recommended that ITIs should start vocational training courses to develop

skilled labour for the sector.



(m) Training about Good Management Practices:

The utensil and cutlery manufacturers in India are mainly small and medium enterprises and

very few units follow Good Management Practices. There is a need for organising workshops

on Modern Management Practices like 5S, TQM, Energy Management etc.. Government can

sponsor such programmes so that the manufacturers can participate and learn to implement

latest productivity techniques to enhance competitiveness of the sector.

(n) Anti Dumping Duty

The basic raw material used for the manufacturing of utensils, cutlery and kitchen tools is flat

stainless steel. It was reported that on the raw material (flat stainless steel) “Anti Dumping

Duty” is imposed by the Maharashtra and Tamilnadu Governments. It is recommended that

no antidumping duty should be imposed on the raw materials.

(o) Price stability for Raw Materials

Most important raw material for this industry is rerolled sheets of stainless steel. Though the

steel prices are regulated by the government, the prices of re-rolled sheets used for forging

cutlery are not regulated, thereby exposing the production cost to fluctuations and instability. So,

the government needs to bring in some mechanism so that the prices of rerolled sheets remain

within a certain range without compromising the profit margins of the firms producing it.

(p) Labour Laws

Stainless Steel Utensils and Cutlery manufacturing processes are highly labour intensive, mostly

unskilled, on a large scale. It does not require much of educated skilled labours. The wages paid

are 30 to 40% higher than the engineering skilled labours in Maharashtra, which is 80% higher in

comparison to the wages paid in Gujarat and other neighbouring States for similar job. The daily

wages paid in Maharashtra at the moment for the unskilled labours are Rs.208 per day, which is

far above a trainee teacher’s wage in Gujarat and other States. If it is continued to stick to the

Labour Laws in Maharashtra, industrialists may have to opt for semi or high tech automation in

order to reduce the labour cost which will lead to further unemployment.



(q) Environment Norms and Regulations in Delhi

The manufacturing of re-rolled steel (patti- patta) (a major input for utensils and cutlery

manufacturing) involves a process called “Stainless Steel Pickling.” During this process acid

is evolved. This acid is neutralized by mixing alkali (caustic soda) in it. New Delhi Pollution

Control Committee, Department of Environment, Govt. of NCT of Delhi has issued a notice

for relocation of pickling units on or before 6th February 2010. Although the pollution created

by the pickling process is neutralized by mixing alkali in it, but even then the Government

does not agree with it, therefore, it is recommended that the extension in time period of

minimum of two years may be given to these units and the alternate site may be allotted to

these units.

(r) Waste minimization and Profitability

Low margins or profitability is a major cause of concern for a large number of firms in this

sector. After going through different processes of manufacturing a lot of steel becomes scrap.

And the low price of this scrap increases the cost of raw material (re-rolled steel) and thus

shrinking profitability. Government should evolve training programmes on waste

minimization training or increase the steel scrap value.

(s) Quality Standards

Since the sector does not follow Good Manufacturing Practices (GMP) and quality control

norms, it is recommended that government needs to fix certain standards for this industry

especially for the units which are engaged in the export of cutlery products. Further, some

symbol for meeting the benchmarks can be awarded to the firms in a way similar to what is

done for gold products.

(t) Abolishment of Inspector Raj

Manufacturing units in this sector feel pressure from various Government Departments as

their Inspectors keep visiting them and putting undue pressures for their own benefits and use

pressure tactics forcing them for settlements. This type of negative vibes exerts undue

pressure on the SMEs and affect their growth adversely.



(u) International Marketing for Stainless Steel

Some grades or standards for stainless steel need to be created. It would help in International

Marketing for stainless steel as well as for increasing the acceptability of utensils and cutlery

implements made up of stainless steel.

(v) Cost of Production/ Raw Material

Basic Metals like Aluminium, Copper, which the utensils are made up of, should not be over

burdened with taxes as it makes them more expensive. It increases the cost of production and

thus lowering the cost competitiveness of the Indian manufacturers.

(w) Raw Material Banks

It is recommended that raw material bank at Mirzapur Brass Utensils Manufacturing Cluster

needs to be created where raw material manufacturers earmark 25-30% of the raw material

for the manufacturing units at market prices. Raw material / fuel available from Petroleum

Depots, Railways at current selling prices should be kept reserved for the clusters. Further,

mutual understanding needs to be developed among the manufacturers for proper

implementation of cluster policy. Awareness generation and dissemination about the benefits

of brass utensils need to be undertaken.

10.3.3 Recommendations for Glassware Sector

(a) Pricing of raw materials and Dissolving Cartel Soda ash, one of the main raw materials used for the production of glass is supplied mainly

by three companies viz. Tata Chemicals, Saurashtra Chemicals and Gujarat Chemicals. It has

been reported that these companies collude to fix the prices of soda ash in the country which

is higher than the prices in the competing countries and thus reducing the competitiveness of

Indian manufacturers on the cost side. Therefore, it is recommended that the government

needs to look into in this matter and ensure that there is no collusion on the part of these

companies. If it is true then some regulation is needed on the part of the government in price

setting of this material and set fair prices for soda ash.



(b) Availability of fuel

This sector has decades of experience and it is evolving with the changing times. The units

have upgraded their technology and thus have their dependency of fuel get changed from

coal to natural gas since 1998, but at present they are facing acute shortage of natural gas, the

main fuel for running the furnace. The situation is aggravated by the RIL-RNRL dispute as

the units have expanded their capacity with the expectation of more gas availability from the

Krishna Godavari basin project. It is recommended that the government should try to mediate

talks between RIL-RNRL to make them reach an amicable solution to the dispute so that

national interests are not jeopardised.

(c) Financial help

The nature of this sector is such that a large proportion of cost comprises of expenditure on

raw materials and thus substantial amount of working capital is needed. The manufacturing

units have complained about the non-availability of short term loans meant for working

capital needs. Government may persuade commercial banks to cater to this need of the units.

(d) Cost of Production and Physical Policies

It has been found that though the Indian glassware products are at par or better in terms of

quality than the products of the competing countries, they mainly lose on cost front making

them less competitive in the international market. Main reasons for higher cost of production

are high cost of raw materials and higher taxation. Therefore, it is recommended that the

taxation structure including rates of taxation and the excise duty limits for the manufacturing

units may be revised. Glassware products being an item of everyday use by the common

man, these products should be kept in the lowest slab of Goods and Services Tax. Also there

should not be any tax on raw material. Only finished products should be taxed.

(e) Relocation of units

Whenever a particular industry/unit is asked to relocate to another site, adequate and quality

infrastructure such as power, natural gas, roads, R&D facilities, training center for labour,



single window clearance counter for seeking clearances from various Government

Departments, cheap credit and grant to meet financial burden which the unit will have to bear

because of relocation, banking facilities etc., should be provided.

(f) Environmental regulations

An authority/agency should be set up whose work will be to certify Pollution Control

Equipment to be installed by a particular unit in MSME sector. If the unit gives Annual

Maintenance Contract to an authorized agency, then that agency should be made responsible

for any emissions not in accordance with prescribed norms.

(g) Market Threat

It has been reported that Glassware products are being imported in India through Grey

Market. Necessary steps should be taken to check imports through Grey market/ under

invoicing particularly from China.

(h) Supply Chain inefficiency in Uttar Pradesh- A bottleneck

Silica, Lime-Soda, Soda ash and Natural Gas are used as input for Glassware industry. Silica

shares about 5% of total cost and Soda part nearly 25% of total cost. Natural gas is mainly

used for the burning purpose. All kinds of raw material cost near about 35% of total cost.

Soda-ash is the main input for the final product of industry, and it is used near about 80

tonnes per day and 35000 tonnes annually. Soda-Ash is imported from Kenya. The uploading

of Soda-Ash for the sector from Kenya to the Nhava Sheva port located in south east of

Mumbai, takes 15-30 days delay which is a major outbreak in supply chain. This problem

leads to affect the cost of producing the final output. If this problem is solved then it leads to

improve the productivity and efficiency of the sector to a large extent.

10.4 Cluster Development

The Utensils, Cutlery and glassware manufacturing units predominantly exist in clusters. A

cluster is a sectoral and geographical concentration of Micro, Small and Medium Enterprises,

manufacturing same or related products facing common opportunities and threats. The



presence of the cluster gives way to create a conductive ground for the development of inter-

firm co-operation and specialization as well as cooperation among public and private local

institutions to further promote the sector.

Some of the important characteristics of cluster at the individual firm level include helping

to overcome disadvantages of economies of scale and weak capital base and enhance

competitiveness by leveraging the advantages of flexible structure and faster decision

making process. At the cluster level, as a whole, it facilitates to face market challenges,

quicker dissemination of information, sharing of knowledge and best practices, better cost

effectiveness due to distribution of common costs and wider public appropriation of

benefits. The cluster approach provides an effective and dynamic path for inducing

competitiveness by ensuring inter-firm cooperation through networking and trust. The

geographic proximity of the enterprises with similarity of products, interventions can be

made for a large number of units that leads to higher gains at a lower cost, which in turn

helps in their sustainability.

To give the required thrust and promote the wholesome development and growth in order to

realize the full potential of manufacturing units involved in the production of Utensils,

Cutlery, kitchen Tools and glassware products, the solution lies in taking full advantage of

the enormous opportunity of both production and employment that these industries offer. The

answer lies in taking full advantage of the Micro and Small Enterprises Cluster Development

Program (MSE-CDP) of the Ministry of Micro , Small and Medium Enterprises (MSME).

This programme comprises of need assessment of the clusters- the major component of the

scheme are Technology Upgradation, Quality Upgradation and Certification, Credit

Facilitation, Marketing Support, including exposure to the global markets and Collective

Capacity Building of the cluster units with a view to enable them to ultimately operate as

collectives of their own. Establishment and operation of Common Facility Centres (CFCs),

organized procurement, marketing, continuous skill and technology upgradation and support

for infrastructural upgradation for resurgence of the clusters are the deliverables of Micro and

Small enterprises Cluster Development Program.



REFERENCES

• Annual Survey of Industries, Central Statistical Organization http://www.mospi.nic.in

• Department of Commerce, New Delhi (http://commerce.nic.in/eidb/default.asp)

• International Trade Statistics, ITC’s website(http://www.intracen.org)

• Various Quarterly Issues, Steel Market Info Jodhpur, Rajasthan (http://www.steelmarketinfo.com)

Website

• http://commerce.nic.in • http://www.estainlesssteel.com/ • http://dipp.nic.in • http://fta.icrindia.org/



Annexure - 1 Field Survey Questionnaire: Company/Manufacturing Unit

National Productivity Council is carrying out a nationwide survey of manufacturing units from Utensils, Cutlery & Kitchen Glassware Sector on behalf of Ministry of Commerce and Industry, GoI. The objective of this survey is to identify and understand major concerns and issues of the sector that affect productivity and export competitiveness of the sector. The study would come out with sector specific recommendations with a view to enhance productivity and export competitiveness of the sector.

(Please fill as per instructions given with each question. Write codes/ values in the box provided at the right hand side)

General information 1.0 States and Union Territories Code :

(1=Andhra Pradesh, 2=Bihar, 3=Delhi, 4=Gujarat,5=Haryana, 6=Karnataka, , 7=Maharashtra, 8=Rajasthan, 9=Tamil Nadu, 10=Uttar Pradesh, 11=West Bengal)

2.0 Product Category (1= Utensils, 2 = Cutlery, 3 = Kitchen Tools, 4 = Glassware)

Company Related Information

3.0 Company/Manufacturing Unit specific information Company Name & Address: ----------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------

-----------------------------------------------------------------------------------------------------

Contact Person’s Name---------------------------------------------------------------------------

Telephone, if any: --------------------------------------------------------------------------------

e-mail address, if any:----------------------------------------------------------------------------

Website, if any:-----------------------------------------------------------------------------------

3.1 Year of Establishment

3.2 Category of the company (1= Informal Sector, 2= Small Scale Sector, 3= Medium, 4=Large, 5= Multinational company, 6= Others, specify)

3.3 Nature of the company (1=Public Limited, 2=Private Limited, 3=Partnership, 4=Proprietorship, 5=Government Owned)

3.3.1 Registration Status

Are you registered under Companies Act, If yes please specify: (1= Yes 2=No) If Yes,

(a) Registration Number ------------- (b) Year of Registration ------------- (c)



3.4 Did your company acquire any firm in other countries?

(1=No acquisition, 2= Full ownership, 3=less than or equal to 50% ownership, 4=more than 50% ownership)

3.4.1 Does your company have merger with any other firm in India? (1= yes, 2=No)

3.5 Does your unit have Quality Accreditations? (1= yes, 2=No)

3.5.1 If yes, please specify the name of the accreditation:

(1=ISO 9000, 2= ISO 14000, 3=ISO 27000, 4=OHSAS 18000, 5=HACCP, 6=Others, specify)

3.5.2 Major Raw Material used in production (Please Specify)

Employment Related Information

4.0 The contractual/daily wage employees during the last ten years (1=Increased, 2=decreased, 3=No change)

4.1.1 What is the estimated percentage of skilled employees? (1=0-10%, 2=11-25%, 3=26-50%, 4=51% & above)

4.1.2 What is the estimated percentage of non-skilled employees? (1=0-10%, 2=11-25%, 3=26-50%, 4=51% & above)

4.2 Growth in wages/salary in the organization during the last ten years. (1= Increased, 2= Decreased, 3=No Change)

4.3 If Increased, please specify the range of increase in wages/ salary during the last ten years?

(1=0-10%, 2=11-25%, 3=26-50%, 4=51% & above)

4.4 If decreased, please specify the range of decrease in wages/ salary during the last ten years?

(1=0-10%, 2=11-25%, 3=26-50%, 4=51% & above)

4.5 Reward/Compensation/Target

(a) Target per worker (b) Reward/Incentive system available (c) Raw material utilization (d) Skill level pay compensation (e) Per worker utilization of raw material

Domestic Market Related Information

5.0 What is the market share of your product? Please specify the range (1=1-5%, 2=6-10%, 3=11-25%, 4=26% & above)



5.1 What is the percentage of Domestic Sales to Total Sales (1=0-10%, 2=11-25%, 3=26-50%, 4=51% & above)

5.2 Growth in the domestic demand of your products during last ten years. (1= Increased, 2= Decreased, 3=No Change)

5.2.1 If Increased, please specify the range of increase in the domestic demand of your products?

(1=0-10%, 2=11-25%, 3=26-50%, 4=51% & above)

5.2.2 If decreased, please specify the range of decrease in the domestic demand of your products in the last ten years?

(1=0-10%, 2=11-25%, 3=26-50%, 4=51% & above)

5.3.1 Extent of competition in the domestic market from local companies? [1=Intense (>20 players), 2=Medium (10-20 Players), 3=Low (0-10 Players), 4=No Competition]

5.3.2 Extent of competition in the domestic market from foreign companies? [1=Intense (>20 players), 2=Medium (10-20 Players), 3=Low (0-10 Players), 4=No Competition]

Trade Related Information

6.0 Is your organization engaged in Exports (1=Yes, 2= No)

6.0.1 If yes, what is the percentage of Export to Total Sales

(1=0-10%, 2=11-25%, 3=26-50%, 4=51% & above)

6.1 Growth in export during the last ten years. (1=Increased, 2= Decreased, 3=No Change,)

6.1.1 Please specify the range of increase in export during the last ten years? (1=0-10%, 2=11-25%, 3=26-50%, 4=51% & Above)

6.1.2 Please specify the range of decrease in export during the last ten years? (1=0-10%, 2=11-25%, 3=26-50%, 4=51% & above)

6.2 Is your organization engaged in Imports? (1=Yes, 2= No)

6.2.1 If yes, what is the percentage of Import to Total Sales

(1=0-10%, 2=11-25%, 3=26-50%, 4=51% & above)

6.2.2 Please specify the type of Import?

(1=Full product, 2=Component, 3=Raw materials )

6.2.3 How much percentage of your sales belong to Complete Knock Down (CKD) category? (1=0-10%, 2=11-25%, 3=26-50%, 4=51% & above)



6.2.4 How many percentage of your sales are Semi Knock Down (SKD) category? (1=0-10%, 2=11-25%, 3=26-50%, 4=51% & above)

6.3.1 Please specify the major country from where you are importing finished products. __________________________________________________________

6.4 Please mention your export destinations

Product Description Countries you are exporting to

6.4.2 Please mention the competitive advantage of competing Countries (1=Low Cost of Production, 2= Capital Intensive Production, 3=Large scale operations, 4=Latest Technology, 5=better Quality of product, 6=Other, specify)

6.5 The factor (s) affecting imports (1= Import pricing Scheme,2= Import licenses, 3=Import quotas, 4=Import prohibition, 5=Quantitative safeguard measures, 6=Export restraint arrangement,7=Non trade Barriers, 8=Any other, specify)

6.6 The factor (s) affecting exports (1=Export taxes, 2= Export quantitative restriction, 3=Certification, 4=Inspection fee, 5=State trading administration, 6=Dual pricing schemes, 6=Non trade barriers,7=Any other, specify)

Factors responsible for Competitiveness

7.0 Availability of Raw materials for production.

1=Imported, 2=Within country, 3=Within Region/State, 4=Other

7.2 Availability of Quality Human Resources. (1=Increased, 2=Decreased, 3= No Change)

7.3 Present Educational system in the country is catering to the industry’s requirements? (1=Yes, 2=No)

7.4 Labour relations are productive? (1=Yes, 2=No)

7.5 Are you satisfied with the quality of infrastructure available in your state? (1=Yes, 2=No)

7.5.1 If No, Please specify the physical infrastructure that requires attention towards development and maintenance?

____________________________________________________________



7.6 Are you satisfied with the Government’s interface with business/private sector? [1=Excellent, 2=Average, 3=Poor]

7.7 Do you consider government friendly towards investor?(1=Yes,2=No)

Competitive advantage of Competing Countries

8.0 Clearance to start a manufacturing unit in India takes. (1=1-2 months, 2=3-5 months, 3=6-9 months, 4=10-12 months, 5=more than one year)

8.1 A clearance to start a manufacturing unit in competing country takes. (1=1-2 months, 2=3-5 months, 3=6-9 months, 4=10-12 months, 5=more than one year)

8.2 Availability and quality of basic infrastructure such as power, water, road, rail etc. in India.(1=poor, 2=reasonable, 3=good, 4=excellent)

8.3 Availability and quality of basic infrastructure such as power, water, road, rail etc. in your unit.(1=poor, 2=reasonable, 3=good, 4=excellent)

8.4 Availability and quality of basic infrastructure such as power, water, road, rail etc. in competing country.(1=poor, 2=reasonable, 3=good, 4=excellent)

8.5 Taxes and other controls in India (1=low, 2=moderate, 3= high, 4=very high)

8.6 Taxes and other controls in competing countries. (1=low, 2=moderate, 3= high, 4=very high)

8.7 Cost of production in India. (1=low, 2=moderate, 3=high, 4=very high)

8.8 Cost of production in competing country. (1=low, 2=moderate, 3=high, 4=very high)

Global Financial Crisis

9.0 Did your company get affected during the global financial crisis? (1=Yes, 2=No)

9.0.1 If yes, (Please Specify).

__________________________________________________________

9.1 Whether the exports from your company decreased due to the global financial crisis? (1= yes, 2= No)


__________________________________________________________

9.2 Do you expect fall in domestic business and export in the coming years? (1= yes, 2= No)


____________________________________________________________



9.3 Have you evolved any strategy to counter global financial crisis? (1= yes, 2= No)

9.3.1 Please explain your current business strategy.

____________________________________________________________

9.4 Do you think better Corporate governance can improve the effectiveness of the business? (1= yes, 2= No)

9.4.1 If yes, Please Explain

_______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Open Ended Question

10.0 What are your strategies/suggestions to improve Productivity and Competitiveness of your Industry? (Please mention a few)

____________________________________________________________________________________________________________________________________________________________________________________

______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

10.1 Policy Interventions urgently required for enhancing productivity and competitiveness of your sector.

(Please mention five)

1. 2. 3. 4. 5.

10.2 Corporate Goverance

Whether rules of Corporate Goverance are followed? Pls Specify

10.3 Financial Reports

(a) Balance Sheet (b) Annual Reports



10.4 Brand Development

Measures to be taken for brand development, please specify

10.5 Any other comments: (Please specify)

________________________________________________________________________________________________________________________

11.1 Data on production and other related variables during last ten years.

Sr. No. Years Sales Value (Rs. Lakhs)

Production Cost (Rs. Lakhs)

Export (Rs. Lakhs)

Import (Rs. Lakhs

1 1998-99

2 1999-00

3 2000-01

4 2001-02

5 2002-03

6 2003-04

7 2004-05

8 2005-06

9 2006-07

10 2007-08

11 2008-09



11.2 Data on Employment and Capital Investment during last ten years.

Sr. No. Years Employees/

workers (Number)

Wages/ Salaries

(Rs. Lakhs)

Capital Investment

(Book Value) (Rs. Lakhs)

1 1998-99

2 1999-00

3 2000-01

4 2001-02

5 2002-03

6 2003-04

7 2004-05

8 2005-06

9 2006-07

10 2007-08

11 2008-09



Annexure – 2

List of Units Contacted For Field Survey and Case Studies

Sl. No. Manufacturing Units/Entrepreneurs 1 JK METAL INDUSTRIES

2 SHEKINA METAL PRODUCTS

3 PHOENIX APPLIANCES PVT.LTD.

4 JB INDUSTRIES

5 BHALARIA METAL CRAFT PVT. LTD.

6 BHARAKATH IMPORTS AND EXPORTS

7 VENKATESWARA INDUSTRIES

8 SASI INDUSTRIES

9 M/S BHARAT METAL WORKS

10 HIND METAL INDUSTRIES

11 TATED METAL INDUSTRIES

12 PRABHU METALS PVT. LTD.

13 METALIKA INDUSTRIES

14 SHRI KRISHNA INDUSTRIES

15 VADIVUDAI AMMAN INDUSTRIES

16 ANAPURANA INDUSTRIES

17 BABAR MOULDING WORKS

18 BHUVANESAWARI INDUSTRIES

19 KING METAL WORKS

20 RLEX TIN AND METALWORKS

21 BENGANI UDYOG (P) LTD

22 JAGDAMBA EXPORTS

23 BINDRA METAL INDUSTRIES

24 NITISH METAL INDUSTRIES

25 M/S MADAN DAS AGGARWAL

26 BENI PRASAD SRI CHAND

27 M/S MAHADEV PRASAD BAABU RAM

28 KUNJ BIHARI LAL RADHEY SHYAM

29 KRISHNA NAARAYAN METAK MANUFACTURER

30 GANGA JI METALS

31 VINDHYA METAL CORPORATION

32 GARG METAL INDUSTRIES

33 NEW JAIN ENTERPRISES

34 GT GLASS

35 JAGDAMBA GLASS WORKS



36 OM GLASS WORKS

37 HIMANGSU KARMAKAR

38 MIHIR KUMAR CHANDRA

39 BAMAPADA KARNAKAR

40 KARTIC KARMAKAR

41 TRAVANGA KARMAKAR

42 GOPAL KAMALYA

43 GOKUL CHANRA RANA

44 CHANDAN KUMAR DAS

45 SHYAM DAS

46 ISMAYAL SK

47 BHAIRAV KARMAKAR

48 DILIP KUMAR SIKARI

49 BADARI NATH DAS KAEMAKAR

50 PANCHAN KARMAKAR

51 RAGHU DAS KARMAKAR

52 UJJAL PATRA

53 SAMIR KALI

54 NEMAI CHANDRA KAITY KARMAKAR

55 GAYARAM BARI

56 VIMAL CHANDRA SIKRI

57 BANSHI BADAN KARMAKAR

58 BANKU BIHARI KARMAKAR

59 BAIDYANATH BAYEN

60 ANAND KALI

61 TARA PADA KARMAKAR

62 PARESH KARMAKAR

63 HALADHAR KARMAKAR

64 DURGA DAS KARMAKAR

65 TIRTHA NATH MONDAL

66 SANTHI NATH KARMAKAR

67 JAL ADHAR LOHAR KARMAKAR

68 GOPAL RANA KARMAKAR

69 MATHUR CHANDRA DAS

70 SUKHDEB DAS KARMAKAR

71 TARUN KAITY

72 BISHNU PRASAD KUCHLYEN

73 BHOLA NATH KARMAKAR

74 SUKUMAR DAS

75 TELU KARMAKAR



76 NILKOMAL DAS

77 PALABAN DUTTA

78 KHOKON MONDAL

79 KRISHNA CHANDRA DUTTA

80 PRODIP MONDAL

81 SUBOL DAS

82 HAMANTO BISWAS

83 PROBHAT BISWAS

84 BINOY BISWAS

85 CHITTARANJAN DAS

86 RASUL SK

87 ANATH MONDAL

88 BIKASH BISWAS

89 AJANTA GLASS WORKS

90 GIRDHAR GLASS WORKS

91 BAJRANG GLASS EMPORIUM

92 ADARSH KANCH UDYOG

93 EAGLE GLASS DECO PVT. LTD.

94 BAJRANG ALUMINUM INDUSTRIES

95 LAL RAM AND SONS

96 MIRZAPUR GENRAL AGENCY

97 MAHADEV PRASAD RAM BABU

98 BENI PRASAD SRI CHAND

99 ARUN METALS INDUSTRIES

100 AGGARWAL DHATU UDYOG

101 ASHOK STEEL AND GENERAL INDUSTRIES

102 BAJAJ INDUSTRIES

103 CHABRA METAL INDUSTRIES

104 HIRA LAL DEV DUTT

105 J.B INDUSTRIES

106 JAI DURGA METAL INDUSTRIES

107 KRISHNA STEEL UDHYOG

108 MDL STEEL PRODUCTS

109 MADAAN UDHYOG

110 NEW HIMALYA METALS

111 RADHEY RADHEY METAL INDUSTRIES

112 CHARAN SINGH

113 GYAN GINGH & SONS

114 GABA METAL INDUSTRIES

115 BRIGHT METAL INDUSTRIES



116 AMBAY JYOTI INDUSTRIES

117 BHAWANISH ALLOYS

118 ADUNIK STEELS

119 ARNODEYA INDUSTRIES

120 DARIYA INDUSTRIES

121 FAIR DEAL CORPORATION

122 KAMBOJ METAL INDUSTRIES

123 NEW POOJA INDUSTRIES

124 MAMTA & COMPANY

125 GURU KRIPA STRIPS

126 KRISHNA ENGG INDUSTRIES

127 HIMALA ROLLING MILLS

128 FRONTIER ENTERPRISES

129 KRISHAN LAL BATRA

130 BATRA TRADING

131 DWARKA ENTERPRISE

132 NITIKA INDUSTRIES

133 JAIN DHATU UDHYOG

134 MOHAN LAL AND SONS

135 RAJ INDUSTRIES

136 JAYSONS MET

137 MUKTA METAL WORKS

138 JM METAL INDUSTRIES

139 J R ENGG

140 AMBIKA STEEL CORPORATION

141 ANKITA INDUSTRIES

142 AGARWAL METAL INDUSTRIES

143 ALANKAR METAL

144 BOHRA INDUSTRIES

145 BENGANI UDYOG PVT. LTD.

146 BOMBAR METAL ENG. WORKS

147 D M METALS

148 CHIRAG METAL CUTTING WORKS

149 DIPLOMA METAL INDUSTRIES

150 B.D. ENTERPRISE

151 ELITE INDUSTRIES

152 GANESH INDUSTRIES

153 GANESH METAL UDYOG

154 HARIOM STEEL CENTER

155 GEETA VDYOG



156 HETAL METAL INDUSTRIES

157 HEENA METAL

158 MEERA METAL IND.

159 M . R . METAL IND.

160 S. S. STEEL INDUSTRIES

161 HITENDRE INDUSTRIES

162 GANAGE ESTATE

163 KASHI ESTATE

164 KASHI BHAI ESTATE

165 GALA

166 SHAI NATH INDUSTRIAL ESTATE

167 SHRI NATHINDUSTRIAL ESTATE

168 NAV GAI

169 GANAG ESTATE

170 KAMLESH METAL WORKS

171 GARDEN INDUSTRIES

172 MAHENDER METAL INDUSTRIES

173 NIRMAL EXPORTS

174 ANANDI ESTATE

175 KASHI ESTATE

176 HITENDRE INDUSTRIES

177 JAY JITENDER ESTATE

178 SUBHODH INDUSTRIES

179 KASHI ESTATE

180 KASHI ESTATE

181 KASHI ESTATE

182 JAY JITENDER ESTATE

183 MAHESH BHAI

184 SHASTRI SUNDER ESTATE

185 ADESHWAR STEELS

186 ARAWALI ENGINEERS

187 B.R INDUSTRIES

188 RISHABH METALS

189 KANAK METALS INDUSTRIES

190 HARISH METAL

191 RAJSHREE UDHYOG

192 JUPITOR ENTERPRISES

193 SH. BAJRANG BALI STEELS

194 RAJ LAXMI INDUSTRIES

195 BHIKSHU METALS



196 RAJ LAXMI STEEL INDUSTRIES

197 SHANKAR INDUSTRIES

198 SIVA STEELS

199 RAJ TRADERS

200 RAJ UDHYOG

201 NASRANI STEELS

202 P.M METALS

203 MEHTA ENTERPRISES

204 SALSAWAS STEELS

205 S.M METALS

206 ALLEN STEELS

207 RUCHI METALS

208 RAJSHREE INDUSTRIES

209 METRO ENTERPRISES

210 T.G UDHYOG

211 LAXMI METALS

212 VEETAX INDIA

213 J.K METALS

214 GOVINDAM STEELS

215 ANNPURNA INDUSTRIES

216 NANNOOMAL GLASS WORKS

217 MILLENNIUM GLASS INDUSTRIES

218 JAGDISH GLASS WORKS

219 DURGESH BLACK &CHINA GLASS WORKS LTD.

220 ASHOKA GLASS CENTRE

221 MEERA GLASS INDUSTRIES

222 MITTAL CERAMICS,

223 PITAMBER GLASS WORKS

224 POOJA GLASS WORKS PVT. LTD.

225 HILITE GLASS PVT. LTD

226 PANKAJ GLASS WORKS LTD.

227 VAIBHAV GLASS INDUSTRIES

228 KAWALITY GLASS WORKS

229 FARUKH GLASS INDUSTRIES

230 VISHESH INDUSTRIES

231 JAGDAMBA GLASS WORKS

232 ADVANCE GLASS WORKS



[ ]

] [ ×

Annexure - 3

Methodology Adopted for Partial and Total Factor Productivity

Estimations

Productivity can be measured in terms of both partial and total factor productivity methods.

Most commonly used partial productivity measures are Labour Productivity and Capital

Productivity estimations. The partial productivities are measured as a ratio of Gross Value

Added per worker or per unit of capital invested.

The partial productivity methodology is based on the premise ‘ceteris paribus’ that only two

factor inputs used in the production process such as labour and capital. Details regarding the

data construction and estimation procedures are given as below.

A. Labour Productivity

• Labour input is considered as the total number of persons engaged in the production

process. The data has been compiled from Annual Survey of Industries summary

results for factory sector data base for various years. The Gross Value Added data

has been first deflated by the whole sale price index for the respective product

category viz. Utensils, Cutlery and Glassware (Broad Category). The formula for

calculating the labour productivity can be given as follows:

Labour Productivity (LP) = ((Gross Value Added/Price Index) X 100)

No. of Persons Engaged

Labour Productivity Growth

• Once the labour productivity has been calculated, we can estimate annual labour

productivity growth using the growth rate estimation formula :

Labour Productivity ═ Labour Productivity t – Labour productivity t-1 100

Growth Labour Productivity t-1



Labour Productivity Growth Index:

To understand the trends in Labour Productivity Growth, we can construct year to year

growth rates as an index of Labour Productivity Growth Rate. Initial value of the series is

considered equal to 100 and the subsequent years Labour Productivity Growth Rates are

added to it cumulatively. This will provide us an index of Labour Productivity Growth for the

Utensils, Cutlery and Glassware sector for the years starting from 1995-96 to 2005-06.

B. Capital Productivity

Since capital investment is given as the book value in the ASI data, we have to

estimate the capital stock in operation for every year. The Capital stock estimation

follows the procedure given below.

• Capital Stock Estimation

To calculate capital stock we have used Perpetual Inventory Method. Capital stock

has been estimated from the book value of Gross Fixed Capital compiled from the

ASI Database.

• Fixed capital data from ASI for the Utensils, Cutlery and Glassware sector has taken

for the years 1995-2006.

• The book value of fixed capital at 1995-96 is multiplied by Gross net ratio of capital

for getting initial year capital stock.

• Incremental capital during the year 1996-97 at constant prices (deflated with the

machinery and machine tools prices at 1993-94 prices) is added to the initial year

capital stock of 1995-96 for getting the capital stock for 1996-97at constant prices.

Incremental capital = ((Fixed capital 1996-97 - Fixed capital 1995-96)

To calculate the capital productivity we have divided Gross Value Added at constant prices

by the estimated fixed capital. The formula used to calculate the capital productivity is as

follows:



[ ]

[ ]

] [

Capital Productivity= Gross Value Added at constant prices

Capital stock at constant prices

Capital Productivity Growth

Capital Productivity

Growth Rate = Capital Productivity t - Capital Productivity t-1 x 100

Capital Productivity t-1

Capital Productivity Growth Index

As in the case of Labour Productivity Growth Index, Capital Productivity Growth Index is

also constructed on a scale 100.

Gross Value Added Growth Rate = GVAt – GVA t-1 x 100 GVA t-1

C. Total-Factor Productivity Growth (TFPG)

Total Factor productivity Growth has been estimated using the Divisia index method. Here, it

is considered that Total Factor Productivity Growth is the result of technical progress.

Technical progress or TFPG is estimated as a residue of the difference between output

growth rates and input growth rates.

WL x Labour Productivity Growth + WK x Capital Productivity Growth]

Where

WL + WK = 1

and

WL = Wage Share in Total Cost

WK = Capital Share in Total Cost



Total-Factor Productivity Growth Index

As in the case of Labour and capital productivity , Total Factor Productivity Growth Index

can also be constructed with the base 100 for the initial year and adding the subsequent

growth rates cumulatively to it.



Annexure - 4

Format for developing diagnostic case studies

• Name of the manufacturing unit:

• Address:

• Company background

• Present status of the company

• Products

• Objective of the company

• Human resource management(management, employees, incentive system etc)

• Business model used-marketing strategy (market share, channels of distribution,

pricing. sales, service, brand loyalty)

• Analyzing past and present strategies adopted by the unit to face opening up of trade

under WTO and its impact.

• Productivity model

• Financial valuations(finance and accounting ability to raise short term as well as long

term capital, accounting practices, tax planning ,cost band barrier to entry)

• Factor productivity/factor ratios

• Export/import technology used

• External influence

• Competitive analyses(forces driving competition, gaining competitive advantage,

generic competitive strategies such as overall cost leadership, product differentiation,

focus on product segment or market segment, etc)

• Impact of the government policies on the growth of unit

• SWOT analyses

• Manufacturing scenario during the last 10 years



Annexure-5

Views of industry associations to make the sector productive and competitive

1. All India Stainless Steel Industries Association

This section provides the summary of the discussions undertaken by Dr S.K Pachauri, IAS

(Retd), former Director General, NPC and Secretary, Govt. of India, who is the Team Leader and

key resource person for this important study alongwith NPC study team members with Mr. Badri

Baldeva, President, All India Stainless Steel Industries Association and other members of the

association.

According to the All India Stainless Steel Industries Association the following Issues needs to be

addressed to enhance the Productivity and Competitiveness of Utensils and Cutlery sectors in

India.

Problems Faced:

Human Resources related Problems

The following are the typical problems faced by the small companies growing from micro levels

to small and medium level enterprises:

1. Due to lack of finance and infrastructural facilities at their disposal, the small companies at its

nascent stage can afford to employ only mediocre level employees. The entrepreneur has to

manage every aspect of his business at the initial stage with these mediocre employees.

2. Highly educated and skilled personnel would not like to join small and medium enterprises as

SME’s cannot afford their demand of high remuneration. Obviously, big companies and MNCs

become their choice of destination.

3. As business grows, during its transformation from micro to small and medium level enterprise,

when the need arises for the qualified persons to look after key areas of operations, the old

employees who were instrumental in managing the affairs of the company became reluctant to

extend their co-operation to the newcomers as they feel threatened of dislodging their positions.



4. Therefore, because of non-cooperation from the existing employees, induction of skilled new

faces becomes a problem, as it takes time for the new comers to get acquainted with the internal

system of the company, to acquire product knowledge etc. The entrepreneur cannot also remove

the old employees as the business becomes dependent on them and also due to emotional

reasons. However, the old persons cannot look beyond their existing activities as they lack the

theoretical and technical knowledge of the field, thus impending the chances of higher growth of

the company.

5. Unlike big companies and MNCs the SMEs cannot have independent departments to handle

the complex issues affecting the affairs of the company in its day to day activities and have to

manage with the existing human resources by imparting training to them, or outsource to

independent professionals at the risk of high costs.

6. The entrepreneur of the SMEs has to fight it out against all odds to achieve the desired results

within his meager resources.

Non Availability of Skilled Manpower:

There is acute shortage of skilled manpower for the sector. The available laborers are

usually unskilled and the unskilled labour is provided training of the specified field

when he is kept on job. When the person is trained in the particular line, in the mean

time he gets a chance to shift to another factory on somewhat higher wages and this

process goes on.

Training these laborers take time and also result in breakage of machines, wastages of

raw material wastage of manpower and time etc.

All these result in lowering the productivity of the manufacturing units and in the long run

hampers their competitiveness in the international market. The sector would benefit a lot if

these unskilled laborers are given some training on trimmers, pressures and polishing by

vocational training institutes or specialized training centers at the clusters.



Labour Laws:

Labour laws are stringent in the state of Maharashtra. But entrepreneurs many a times fail to

fully implement the guidelines issued by Ministry of Labour & Employment relating to

Employees Provident Fund and Insurance Schemes due to the following reasons.

There is lack of awareness among these unskilled workers since they are not so

educated Laborers about the benefits of the schemes.

These laborers are mobile in nature and migrate to different states depending on job

opportunities. As a result they are sometimes hesitant to get themselves enrolled in

different scheme and forego a portion of their earning towards PF contribution or

premiums to insurance companies.

Laborers also fail to avail the benefits of health insurance due to non availability of

approved health centers in the vicinity. As a result the cost of health care is borne

either by the manufacturers or the individual laborer.

The MSMEs dealing in Utensil and Cutlery would benefit a lot if awareness workshops relating

to Employees Provident Fund and Insurance Schemes are taken by the government agencies in

the vicinity of the clusters. Further, the schemes may be formulated in such a way that it is easier

for the manufacturers to implement and convenient for laborers to avail the benefits of the

scheme resulting in the overall development of labour and the entrepreneurs.

Minimum Wages:

The cost of production for the units located around Mumbai Region are higher than their counter

parts in other states as the minimum wage in the State of Maharashtra is Rs.208 per day which is

higher in comparison to States like Gujarat where it is Rs.110 per day. In Chennai the minimum

wage is around Rs.90 per day.

To make the sector competitive across state, there needs to be sector wise wage parity among

states.



Lack of Management Practices:

The manufacturers of utensil and cutlery in India are MSMEs and there is lack of management

practices in these units.

All India Stainless Steel Industries Association suggests that Workshop on Modern Management

Practices like 5S, TQM, Energy Management etc may be sponsored by government so that the

manufacturers may participate and learn to implement the latest productivity techniques to

enhance competitiveness of the sector.

Raw Material (Stainless Steel):

There is uncertainty in the timely availability of raw material (Stainless steel). It

usually takes 4 to 9 weeks in the procurement of raw material from the domestic

market. As a result the production schedule get disturbed and manufacturers find it

difficult to maintain their export commitments.

In recent times there are frequent fluctuations in the prices of raw material (stainless

steel). This is making situations difficult for manufacturers to cope with in the

international market as the expected return from the quoted prices is sometimes

different than the actual return. Further, future planning regarding to production and

marketing gets disturbed.

The cost of coil needs to cheaper than Pata.

All India Stainless Steel Industries Association suggests that Steel Authority of India (SAIL)

may be an active supplier of raw material for the MSMEs of the Utensils and Cutlery sectors in

India.

Antidumping Duty:

The Antidumping Duty that has been imposed by the government is increasing the cost of raw

material (stainless steel) in the domestic market. As a result, the production cost is becoming

high and Indian manufacturers are not able to compete in the international market with Chinese

manufacturers.



Power Problem:

There is interrupted supply of power. Power cuts in the Vasai- Dhanu region vary

from 6 to 8 hours a day. This not only hampers the production process but also result

in wastage of time and man-hours.

The unit cost of power is also high in the region. Further, the fuel adjustment charge

(30- 40%) increases the total bill.

The method of estimating the connected load also needs to be reviewed as the

manufacturers are not using all the machines simultaneously. The usages of machines

depend on the product to be manufactured and the process involved there in.

The shortage of power along with higher cost is lowering the productivity and

competitiveness of the sector.

2. Stainless Steel Aluminium and Brass Utensils Association, Jagadhri

Stainless steel Aluminium and brass utensils are being manufactured in Jagadhri by tiny units

which are operating from clusters, interdependent on each other for various processes of

manufacture. Manufacturers are surviving on their own grit and determination without any

support, infrastructure or aid from the government. The various problems being faced by these

tiny units operating from cluster in Jagadhri are as follows-:

1. There is an acute shortage of skilled labour and the next generation of skilled labour is

not forthcoming. Special courses from I.T.I. and related institutes should be made

available for them so as to attract them in the industry.

2. There is severe power shortage in the city. Abrupt power cuts without any prior

notice/information add to production losses. Power being supplied to units should be

regulated.

3. This type of cluster industry should be protected from day to day interference of

Inspector Raj.

4. There is a total Tax holiday for industry in the adjacent states of Himachal Pradesh and

Uttarakhand. Therefore industry operating from Jagadhri cluster is unable to compete

with these states. The Tax structure should be at par with the adjacent states.



5. Sales Tax structure should be uniform in the entire country and there should be no

discrepancy for any state.

The Stainless Steel Utensils are being made from the S.S. Flats/pattas/pattis/circles which

are procured after paying full rate of excise duty. Earlier this product was availing the

benefits of S.S.I. i.e. concessional rates of duty in the form of different slabs i.e. till 75 Lacs

sale 50% of excise duty was paid, 75-150 Lacs 75% of excise duty was charged. However

with the finance bill 2003 Pattas/Pattis have been excluded from the preview of exemption

available to units upto clearances of Rs. One Crore (notification no. 8/2003-CE dated

1/03/2003-effective from 1/04/2003). These Patta/Pattis are an intermediate product in the

manufacture of S.S. Utensils (Nil Duty). So when the duty on utensils is nil, as per natural

justice and for the survival of utensil units there should be no duty on the intermediate

product i.e. Patta/patti/circles.

S.S. Utensils are used by the common average people. It is important that for the survival of

these tiny S.S. Utensils units which are providing the maximum employment in such type of

backward area total exemption of excise duty should be given.

In Jagadhri it is imperative for authorities to give total exemption/Tax holiday to this cluster

industry so that they are in a position to compete with adjacent states which are enjoying

total tax holiday.

3 Rajasthan Stainless Steel Re-Rollers Association Members

About 70% units of re-rolling manufacturing stainless steel patta/patti are lying closed and more

than 2.50 lacs are unemployed due to closure of these small scale industries. Previously in the

1994 realizing the practical problems faced by these SSI units, your goods self as the than

Finance Minister come forwarded and introduced compound levy scheme under the Excise Law

of Rs.5000/- per month per machine without any cenvat credit, and from time to time this

compound levy was gradually increased. But in the year 2006-07 compound levy was drastically

increased from Rs.15000/- to Rs.30000/- per month per machine as compare the cenvate rate for

iron and steel was earlier 16% reduced to 14% on 01.03.08 and further reduced to 10% on

07.12.08, and now to 8%, but there were no reduction in the compound levy levied on these

Tiny and SSI Units and the increase in the compounded levy excise duty on stainless steel cold



re-rolling machines in the budget for the year 2006-2007 just double, from Rs. 15000/- to Rs.

30000/- Per machine per month.

The finished products are used in the manufacturing of Utensils, which are used by the Lower

and BPL class people not only in India but all over the world. Looking to this situation and for

future of these SSI and Tiny units, association request for reduction of compound levy to

Rs.5000/- per month per machine, it will not affect govt. revenue too much as compared if the

Unit is closed and unemployment problems due to closure of these Units and if the necessary

steps immediately take by government then that the stainless steel cold re-rolling industrial

sector of India can be saved.

4. Mirzapur Metal Manufacturer Association Members

In this section we provide the findings of the meeting that the NPC study team members had

with Mr. Vishwanath Prashad Agrawal, Chairman, Mirzapur Metal Manufacturer Association

and other members of the association.

The brass utensils manufacturing cluster is located in the Mirzapur city. This is the oldest

industry in Uttar Pradesh. The main products of this cluster are brass utensils.

The formation of the clusters in the globalised environment under WTO regime is in fact

essential. Government of India, Ministry of Small Scale Industries under their cluster

development program on UNIDO concept selected the cluster for its survival and development.

The brass & bronze metal utensils cluster of Mirzapur city is one of the oldest clusters in the

country. The cluster’s actors report that the cluster has been running for the last 150-200 years or

more than four generations. The manufacturers observed that the main reason of development of

brass industry is due to availability of raw material, sand, traditional skills and need.

Present status of the cluster:

At present there are more than 300 units/enterprises manufacturing brass utensils and related

items with total direct employment of the cluster approximately 5000 persons and indirect

employment of around 5000 persons. Mirzapur city is situated in between Allahabad &

Mughalsarai Distt. It is around 97 K.m. away from Allalhabad. It is also directly connected with

all routes between Delhi- Mughalsarai. The Mirzapur city is exactly located south of Son River.



The son river has special kind of black and yellow sand, which is mostly useful for preparing

mould, and this sand has special characteristic that the temperature bearing capacity of the sand

is also high. This river has bulk quantity of molding sand and clay.

Total installed capacity of the brass cluster Mirzapur is approximate by 6000 MT per year and

nearly 8% of the total population of the city is involved in the activity of brass utensils

manufacturing. Kasera community is famous for manufacturing brass & German silver utensil

since long time in India. Now the people have started using stainless steel utensils but the market

demand for the brass utensils still exists.

Mirzapur Brass Cluster is engaged in the production of various type brass & German silver

utensils such as that lota, kasendi, kalchul etc. The cluster consists of different SMEs and tiny

enterprises with only a few independent brass utensils manufacturing units having integrated

production facilities from processing of raw materials to finished products like utensils. Both

dependent & independent units are having a common association. This is weak cluster and brass

utensils production from cluster has remained consistently at low levels till mid ’90s and has

started to grow now but the growth is slow.

The economic condition of the artisans is not very good. The production of the utensils is carried

out manually with old and obsolete technology. The cluster has not changed in terms of

technology, market, product etc for a long time. The profit margin is very minimal, around Rs 4/-

to Rs.5/- per kg of utensils sold. But there exists some market potential for their manufactured

utensils. Finished product is also sent to Delhi, M.P, Orissa, Jharkhand, Bihar, U.P and indirectly

to markets in Nepal & Bangladesh as well. These utensils have good reputation and reliability in

the market but they do not have any brand name and good liking among distributors, dealers,

traders, export house etc.

Major raw material used in production comprise of Brass scrap, Copper scrap, Zink Dross, Zink

Ingots, Copper Cathode, Nickel Silver Scrap, Gun Metals Scrap, Aluminum Ingots and Scrap.

According to the Mirzapur Metal Manufacturer Association the following Issues needs to be


India.



Problems faced by the cluster:

1. There are major power cuts in the whole city ranging from 8 to 12 hours per day. These units

work during the day time only and these power cut are during the day hours when the units

are working. Due to these power cuts manufacturing process/finishing process either remains

incomplete for the duration of power cut or is being done by operating diesel engine

generating sets resulting in a rise in the cost of production.

2. The condition of the roads is very poor. As a result, difficulty is being faced for the

transportation of raw material as well as for the transportation of finished goods.

3. The major utensils manufacturing cluster is being operated in the residential area because no

new industrial area has been allocated creating a problem of heavy sound pollution in the

residential area.

4. Small Industries Development Bank of India had been set up with the objective of assisting

the development of SSI in India. This institution has number of schemes is for the SSI sector

link TDME, CGFT, TUF etc. This institution has direct links with cluster but most of the

cluster’s actors are not able to avail such facilities provided by SIDBI. SIDBI also assists in

many development activities especially HRD, Training, and technology up gradation etc.

Therefore SIDBI can play major role for implementation of the action plan and the

development of brass utensils cluster Mirzapur. No unit in this cluster is engaged in exports

and only local markets like Uttar Pradesh, Bihar, Jharkhand, Delhi, M.P., Orissa and West

Bengal are catered. No assistance has been offered to any manufacturing unit from SIDBI or

any other government institution to venture into exports.

5. The business development service is not available in Mirzapur cluster for rapid growth.

There is no management institute, technical training institute, no R&D laboratory, no testing

facilities, no interaction with CA, no design development institute and no marketing experts

available in Mirzapur. Therefore, there is need to have networking and consortium among the

SMEs in the cluster and BDS linkage with cluster. National metallurgical laboratory,

Jameshedpur is one of the premier institutes working in the field of metal service and



metallurgy. This institution has developed several technologies and linkage with a branch of

this laboratory would be definitely beneficial to the cluster.

6. Manpower issues: The unskilled labour comes to the units in search of bread and butter.

When they are kept on the job and taught the skills for the manufacturing of brass and

German silver utensils, they gain the experience and migrate to places like Nepal and start

working in the same line. In Nepal the wages of the labour are about two times as compared

to Mirzapur and due to this continuous migration, there has emerged an acute shortage of

labour in Mirzapur cluster.

7. Government rules and regulations: Most of the entrepreneurs are finding it difficult to

comply with rules and regulations of several government departments. Cluster’s actors

inform that they are complying with government rules. Central excise duty is levied on

production of brass sheet in rolling mills and for production of new utensils 4% sale tax is

levied in the state of Uttar Pradesh while in the other states like West Bengal, Orissa and

Assam the entrepreneurs are exempted on production of utensils. Also a Central Billing Duty

(CBD) is levied on these SSI, which may be taken back. Therefore, government rules and

regulations have to be liberalized and uniform rules are needed. The Govt. Depot should be

as a facilitator rather than a regulator.

8. Safety gadgets: It has been observed that during process of manufacturing stages, no

precautionary measures are taken by the artisans. This is because of lack of awareness and

negligence. Some of the stages where safety gadgets are required are melting of metal,

pouring of molten metal and finishing operation. Therefore there is a need to create safe

working habits and conditions. Some of the safety equipments that can be used are

mentioned as follows:

Personnel protective equipment such as safety glasses, gloves, safety shoes and aprons are

required to be used during melting, pouring and casting stages.

To maintain good housekeeping, waste can be kept in specified containers for disposal.

Fire prevention should be a work habit and availability of extinguishers needs to be

ensured.

First aid boxes should be kept in all the units.



Even if the safety rules as enforced it may be ineffective if any attempts are made to control

accidents without first creating a proper safety philosophy, teaching safety principles and

eliminating misconceptions about the causes of accidents. This can be achieved by training of

artisans to teach about the safety principles and work related hazards etc.

Suggestions of the Association:

1. Allotment of land for new industrial area : 50% subsidy from industry departments is

available for developing a new land for the industry but the association is facing a lot of

hassles in getting that subsidy. The association has identified a 20 acre plot of land for

development of industrial area and the process is on to handover it to the industry

department.

2. Regular power supply is needed: Since mirzapur region has 3 power plants (2 NTPC and 1

state OBRA power plant), a dedicated line should be made available to the cluster so that the

power problem can be solved. The current requirement of the cluster is around 5 MW per

day.

3. Financial help is required: Since the loans to the carpet industry in the mirzapur hve turned

bad in the recent years, the banks are reluctant to provide loans to the metal industry. Lead

bank, Allahabad bank may be asked to provide loans to the good MSME units in the metals

industry especially in the eastern U.P. further, MSME can provide credit ratings to the units

based on their previous track record.

4. Technology up gradation: common facility centre (part of hard intervention) is required but

the government is not responding. Only soft intervention is available. Technology needs to

be upgraded urgently. Subsidy for technology upgradation is must.

5. Raw material assistance: central government ordinance factories were providing the raw

material earlier at 10% subsidy but this subsidy is not available now. If the raw materials are

available free of excise duty from the ordinance deposits of the central government then the

cost of the production will go down and productivity will also go up.



6. Develop new market areas domestically and abroad: if all the information related to export

clearance, product features etc. may be put in a portal (website). As of now such linkages or

more content information is not available. One portal is currently working i.e.

www.mirzapurutensils.com . MSME may help in further advancement of this portal.

5. Delhi Stainless Steel Traders Federation (Regd.)

In this section we provide the findings of the meeting held by Dr S.K Pachauri, IAS (Retd),

former Director General, NPC and Secretary, Govt. of India, who is the Team Leader and key

resource person for this important study and NPC study team members with Sh. Jai Kumar

Bansal, President- Delhi Stainless Steel Traders Federation (Regd), and other members of the

federation.

According to the All India Stainless Steel Industries Association the following Issues needs to be


India

Problems:

1. Power cuts: Power cuts cause an interruption in the production process and wastage of

time. Also, generators have to be used to resume the operations which is a costly affair

and leads to rise in the cost of production.

2. Notice for relocation: The patti-patta is manufactured through rolling process and in this

process the pickling process is also involved. This combined process is called as

“Stainless Steel Pickling.” During this process acid is evolved. This acid is neutralized by

mixing alkali (caustic soda) in it. Now Delhi Pollution Control Committee, Department

of Environment, Govt. of NCT of Delhi has issued a notice saying, “It is hereby directed

that all such units, engaged in the activities falling under prohibited/ negative list shall

stop their activities and relocate themselves outside Delhi on or before 6th February

2010, without fail. Failure to do so will invite strong regulatory action as per provision of

Air (Prevention and control of Pollution) Act, 1981 and Water (Prevention& Control of

Pollution) Act, 1974”. If these manufacturing units which are engaged in the production



of patti-patta are closed on the basis of above notice then not only these units which are

in the production of patti-patta will be affected but those units which are engaged in the

manufacturing of stainless steel utensils, cutlery and kitchen tools will also be affected.

3. Human resources problem: There is no category of skilled labor in the industry. The raw

hand labour is picked up, work is assigned to him and after learning the specified job the

labour is called skilled. But there is no supply of labor with some formal training for this

industry.

Suggestions of the association:

1. Government should further enhance the power generation capacity and dedicate a

particular line to the industrial area. For the time being, government can should provide a

regular supply of power at least during the day time and have cuts during the night.

2. Although the pollution created by the PICKLING process is neutralized by mixing alkali

in it, but even then if the Government does not agree with it then the time period of

minimum of two years may be given to these units and the alternate site may be allotted

to the units to relocate. If this problem is not taken seriously, then the Indian market will

be flooded with China made utensils, cutlery and kitchen tools.

3. Some vocational training should be imparted in schools so that skilled labor is available

for handling sophisticated machines and carrying out complex operation of modern day

assembly lines.



Annexure- 6

MINUTES OF ROUND TABLE CONFERENCE

Cutlery and Utensils

• Infrastructure facilities are the main concern of the sector. Only allotment of plots is

insufficient. Since the sector requires the supply of Natural Gas for various operations,

availability of natural gas needs to be ensured for the development of the clusters.

• Raw material banks need to be created where raw materials manufacturers earmark 25-

30% of the raw material for the manufacturing units at market prices. Raw material / fuel

available from Petroleum Depots, Railways at current selling prices should be reserved

for the clusters. Further, mutual understanding needs to be developed among the

manufacturers for proper implementation of cluster policy. Awareness generation and

dissemination about the benefits of brass utensils need to be undertaken.

• Export of Cutlery & Utensils amounts to Rs 1200 Crores.

• Emphasis should be laid on the recognition of existing clusters such as Bhayander,

Jagadhri, Kundli, etc.

• Establishment of R&D center in each cluster.

• Single Window Clearance needs to be introduced for all Government procedures like

Electrical Connections, Pollution Clearances etc.

• Committee comprising of Government officials and Industrialists belonging to the

Cluster should be constituted for monitoring progress of the cluster.

• Working Capital Requirements needs to be provided at subsidized interest rates.

• Capital requirement for technology upgradation, R&D facilities & infrastructure should

be available at considerably low rate of interests.

• For a fair competition in the industry, subsidy and taxes should be at par with the

neighbouring states within India. For instance, the manufacturing units of utensils cluster

in Jagadhri (Haryana) should get same tax benefits like the units located in neighbouring

states of Uttarakhand and Himachal Pradesh. Variations in tax rates are forcing

industrialists to relocate the manufacturing units to other states.



• Government schemes do not help in increasing production. It just makes the industries

move from one place to another.

• Whenever Goods and Services Tax (GST) is implemented the utensils sector should be

put in the lowest tax slab i.e. 1%.

• City development is forcing the industry to relocate the units to outside the city. For

major cities this is OK but adequate space should be provided outside the city to enable

the industry to shift. In smaller towns the historical back ground of the town should be

understood before making any master plan and ordering the relocation of the Industry.

For example a town like Jagadhri was built as an industrial area about 125 years back.

Today the town has developed into a big Industrial hub. Unfortunately the new master

plan envisages that all industry should be shifted away from the town. No space has been

identified in the master plan for relocation of the industry. In such a case instead of

relocating the industry, a new town ship could be developed somewhere nearby to cater

to the residential requirements with pollution free green environment. In major cities

where the shifting is necessary to make the city green, land and the cost of shifting of the

industry should be borne by the government.

• This industry is labour intensive and dominated by small and medium enterprises. There

is shortage of skilled labour. ITI should start courses to develop skilled labour for this

sector.

• Enough time should be given for the implementation of the new schemes. For example,

recently VAT was revised from 4% to 5% but the industrialists were not given sufficient

time to change the software etc. causing so much of inconvenience and anguish.

Stainless Steel Cutlery and Utensils:

• For the stainless steel manufacturing industry, technology development and automation is

a must.

• The requirement of financial support and expertise in the industry has been emphasized

upon. Government should develop adequate resources in terms of availability of finance

& skill development of manpower.



• Earlier Government used to give 1% rebate to Stainless Steel exporters. Of late this

scheme has been withdrawn. It needs to be continued for the development of the sector.

• The industry is facing intense competition from China. More stringent laws to curtail

imports should be enforced.

• There is no raw material for stainless steel in the market as most of the iron or gets

exported and the finished product finally competes with Indian Industry.

• The Freight Assistance scheme needs to be continued.

• The concept of cell manufacturing system/ one roof manufacturing system should be well

interpreted. It increases the excise duty. For example in the case of circle cutting and

bench pressing, these are two different operations which are normally performed at two

different locations.

• Some grades should be created for stainless steel. It would help in International

Marketing.

• Low nickel stainless steel should be made acceptable in India.

• According to BIS standard 200 Series stainless steel is not specified as a Food Grade

which is hampering export.

• 13 Chrome is accepted worldwide but not in India.

• Stainless Steel Utensils and Cutlery manufacturing is highly labour intensive, mostly

unskilled, on a large scale. It does not require much of educated skilled labours. The

skilled labours, especially, machine operators, etc., are uneducated people. The wages

paid are 30 to 40% higher than the engineering skilled labours in Maharashtra, which is

80% higher in comparison to the wages paid in Gujarat and other neighbouring States for

similar job. The daily wages paid in Maharashtra at the moment for the unskilled labours

are Rs.280 per day, which is far more than a trainee teacher’s wage in Gujarat and other

States. If it is continued to stick to the Labour Laws in Maharashtra, industrialists may

have to opt for semi or high tech automation to reduce the labour cost which will lead to

further creation of unemployment.

• Training in production activities like rolling, spinning, buffing deep draw, tool making,

etc, is provided by the employer only. There’s no special training provided by any



institution, resulting in low productivity. There is a shortage of skilled/unskilled labours

in this sector of the industry. The unskilled labours recruited are given on the job training

on shop-floor and paid wages @Rs. 208 per day. They are given the training risking the

cost of machineries and other tools. This wage is similar to stipend. It is, therefore,

necessary to have focus on proper training of the unskilled labours to help generate

employment opportunities. There is no technical or financial assistance from Government

to train the employees in this sector. Being highly labour oriented and employment

potential sector, Government should come forward to assist the industry by providing

technical and financial assistance for training the labour force in this sector. Lot of

documentaries show that a large number of people in India earns $1-$2 per day by way of

daily wages. With proper training provided the same person can earn around $7-$10 per

day.

• SMEs in this sector are under Pressure from various Government Departments as their

Inspectors keep visiting them and putting undue pressures for their own benefits and use

pressure tactics forcing them for settlements. This type of inspector raj increases undue

pressure on the SMEs and affect their growth adversely.

• Categorization of Industrialists should be undertaken and a card system should be

developed for industrialists on the basis of their contribution in Gross Production ,

Employment, R&D, Innovation of the country.

• Assistance is required in establishing pollution norms.

• Technology upgradation and process development is an area of concern. Proper systems

need to be developed for environment norms and concerns.

• Training for Environment Management/ Control System needs to be given.

• Technical Issues for reducing environment pollution need to be addressed. Servo press

and Electro pneumatic machines should be used.

• Sales volume per head is very low that is leading to low productivity.

• Kundli needs to be developed as an Industrial Cluster. For this a proposal may be sent to

MSME.

• India should start a Cutlery Development Institute as in the case of China.

• Market Research studies need to be conducted.



• Land in Kundli costs Rs 8-10 Crores. Government should develop the plants and give it

on a rental basis. Land can also be made available at reasonable prices.

• SAIL should help the stainless steel industry by providing raw material as well as training

for producing better quality product.

• Government should financially support the units who are employing handicapped

employees.

• There is no industrial area for Stainless steel in Delhi. In fact Wazirpur Industrial Area

was originally developed as an industrial centre for hosiery.

• Subsidy should be given to develop tool room centres.

Glassware

• In Glassware sector Domestic Industry needs to be promoted.

• Competition from China is a major concern.

• The Glassware products are entering in Indian market through grey market. Government

should conduct frequent raids to control this by way of asking them to show invoices.

• Anti- dumping duty on finished Glassware products need to be introduced.

• There should not be any anti-dumping duty on raw materials.

• Incentives should be given for importing raw material.

• There should not be any tax on raw material. Only finished goods need to be taxed.

The sector should put emphasize upon the need for Brand Building and Brand Image.

The industry associations and manufacturers need to develop their own brand name and

brand image for better acceptance in the market.



STUDY TEAM

PROJECT ADVISORS 1. Shri. N.C. Vasudevan, IAS Director General

2. Shri. O.P. Joshi Deputy Director General

3. Shri. V.K. Soni OSD (Economic Services & Admin.)

STUDY/CORE TEAM

Team Leader: Dr. S.K. Pachauri IAS Retd. Former Director General, NPC

Project Director: Dr. K. P. Sunny Group Head (Economic Services)

Team Members: 1. Dr. Rajat Sharma Deputy Director (Economic Services) 2. Mr. Deepak Gupta

Asstt. Director (Economic Services) 3. Mr. Mukesh Prakash

Asstt. Director (Economic Services) 4. Mr. Satvir Malik

Research Associate 5. Mr. Nitin Madan

Project Assistant

6. Mr. Sanjay Kumar Project Assistant

Field Survey: NPC Consultants/Research Associates/ Project Assistants/Naturals Care

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