Use Capital Goods Scheme to bridge technology gaps

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The industry should come forward and make use of the Capital Goods Scheme to bridge the technology gaps and acquire technologies, said Anant Geete, minister for heavy industries & public enterprises, at a workshop on ‘Technology development for capital goods: Constraints & the way forward’ in Ahmedabad.
Valued at Rs 1000 crore, the scheme – notified by Department of Heavy Industries (DHI) – was launched under the Make in India initiative of the government for providing support to the industry to acquire technology, set up technology development centres in collaboration with institutes, and create common infrastructure for the capital goods industry.

In capital goods sector, the technology gap is widening when compared to other countries. Dependence on high-end technology capital goods is increasing in the country and upgradation of technology levels, continuous R&D efforts and self sufficiency of the nation in this sector requires desired levels of investment and support by the Government. Under these circumstances, Capital Goods Scheme of the DHI will help the industry in acquiring technologies from abroad or to develop such technologies within the country with the support of an institute, said Geete.

A unique component of the scheme is technology acquisition fund where government is giving support upto 25 percent of the cost of technology subject to the limit of Rs 10 crore. The scheme would particularly be helpful for the industry in Gujarat as lot of capital goods industry and components producers are present in the state in sectors like textiles machinery, plastic machinery, machine tools, process plant and engineering. The engineering clusters of Gujarat can take advantage of this scheme to achieve next levels of the technology.

On this occasion, M S Unnikrishnan, co-chairman, FICCI Capital Goods Committee, & MD & CEO, Thermax Limited, said, “This scheme of the DHI was indeed the need of the hour for capital goods sector. The scheme has rightly focused on the technology development besides other aspects.”

According to Geete, while there are some players who have technological competencies, especially in design capability, application innovation and process innovation, the technological capabilities of large number of players, especially in the SME sector, are limited. India has become one of the largest importers of capital goods in the world importing around $ 20 billion of capital goods imports per year. This has adversely affected the indigenous capital goods industry, said the minister.

Geete informed that his Government was working with countries like Germany, USA etc to liberalise the exports of dual use technologies that would benefit the capital goods sector. Transfer of technology from other developed countries has not been significant despite liberalisation of policies for technology transfer and foreign direct investments. Constraints imposed by developed countries on dual use items exports have restricted the technology development in India.