Pune: A Centre for International Business
Decoding Pune’s Role in the Export Story of India
Today, the world economy is undergoing many changes and the focus on exports is increasing. It is necessary to create an ecosystem that will encourage local companies to explore global business prospects as well as encourage foreign companies to set up their units in the country, that will contribute to domestic manufacturing and exports.
Pune has immense potential to become the export hub of the country. According to the data put out by the Ministry of Commerce and Industry for December 2020, Pune ranked first in Maharashtra’s district-wise exports, with exports worth Rs. 5,929 crores.
It is home to some of the biggest industries across these sectors:
1. Automobiles: Pune is one of the largest auto-hub in the country with several manufacturing and ancillary units. Large scale companies like Tata Motors, Mahindra & Mahindra, Bajaj Auto as well as international auto makers like Volkswagen, Mercedes, Piaggio, John Deere have their factories here. Several tier 1, tier 2, and tier 3 companies supply components to these and many other OEMs across India and abroad. Automotive Research Association of India, which is India’s premier R&D, testing and certification institute is also located in Pune. Auto Cluster Development and Research Institute Ltd (ACDRIL), which assists MSMEs to keep up with trends in the auto industry is also situated in the Pimpri-Chinchwad region of Pune.
2. IT and ITES: Pune has witnessed a boom in the Information Technology sector in the last couple of decades, with the development of several IT parks at Hinjewadi, Magarpatta, Kharadi, etc. Some of the top IT firms in the country like TCS, Infosys, Persistent, KPIT Technologies etc. as well as a host of MNCs have their offices in Pune.
3. Electronics: Pune also has a large number of companies working in the electronics sector. Most of these companies were set-up in the 1980s/90s driven by conducive policy reforms in the telecom sector as well as the upcoming trends in the micro-processors and control systems. India’s largest brownfield electronic cluster is also being set up at Bhosari, in Pune, by MCCIA Electronic Cluster Foundation (MECF) under the Ministry of Electronics and Information Technology (MeitY). This will provide world-class infrastructure to electronics manufacturing companies as well as help in the development of state- of -the art R&D facilities in Pune.
4. Food Processing and Agriculture: Some of India’s biggest players in the food-processing sector are located in Pune. They include names like Pravin Maselewale (Suhana), Weikfield Products Company Pvt. Ltd, Gits Food Products Pvt. Ltd, Rasoi Magic Foods India Ltd, Parampara Food Products, Tasty Bite Eatables Ltd, Venky’s India Ltd, Chordia Food Products etc. Pune also has a strong presence in the dairy sector, with Chitale and Katraj being the top brands. Pune also has a very good climate, a major conducive factor for the agricultural sector. Maharashtra Industrial Development Corporation (MIDC) has also set up a floriculture park at Talegaon in Pune to provides nursery, post- harvest, infrastructure and logistic facilities. Several Farmer Producer Organisations (FPOs) have been set up in Pune district which enable the farmers to supply quality agricultural produce to institutional and individual buyers in India and even abroad. MCCIA has also set up the first Internet based Rural Information Centre in Pune district at Chale village to help famers get real time data about weather, market rates, technology etc. This has prompted the state government to replicate the model and today there are over 330 such centres.
5. Life Sciences: Pune is also known for its production facilities in the life sciences sector. Multinational companies like Glaxo, Pfizer, Novartis, Ciba etc. all get their drugs manufactured in Pune. The significance of this sector in Pune was highlighted during the Covid-19 pandemic. Pune based Serum Institute of India, produced millions of doses of the Covishield vaccine, developed by Oxford University and AstraZeneca. This vaccine is not only being used for domestic use, but is also being exported to several countries. MyLab Discovery Solutions, a startup in Pune developed the first Covid-19 domestic test kit. Gennova Biopharmaceuticals based in Pune has also developed India’s first m-RNA vaccine in collaboration with HDT Biotech Corporation, USA. Pune also has top research institutes in the field of health sciences like the National Institute of Virology (NIV), National Aids Research Institute (NARI) etc.
Pune also has a very good startup ecosystem. According to a 2019 KMPG Report, Pune has 3200 startups, some of them like Icertis, First Cry and PubMatic have reached the unicorn status. Recently, in December 2020, PubMatic got listed on Nasdaq. According to the Center for American Entrepreneurship’s report, ‘Rise of the Global Startup City’, Pune is ranked 10th in the ‘Global Next’ category. This category includes locations that couldn’t qualify as ‘Established Global Startup Hubs’, but rank among the 100 cities for global venture capital deals and among the top 60 for angel and seed-stage investment. There are several incubators and other organisations in Pune like NCL-Venture Centre and TiE which are working actively to support the startups.
Pune also has some of the best human talent. Over 40 national-level Research and Development (R&D) institutes such as the National Chemical Laboratory (NCL) and the Indian Institute of Science Education and Research (IISER) are based in Pune. Several Indian companies and MNCs also have their captive R&D centres in Pune. Pune also has a strong engineering sector with big companies like Thermax and Praj Industries Ltd. It also has a pleasant climate throughout the year and provides a good quality of life, compared to other cities.
Pune should tap into the opportunity created by the recent policy reforms, that provide an impetus to the exports of the country. Two of the key ones are the Production Linked Incentive (PLI) and the Remission of Duties and Taxes on Export Products (RoTD). The PLI scheme, worth 1.46 lakh crores will give companies in the 13 identified sectors incentives on incremental sales from products manufactured in domestic units. The RoTD scheme will give exporters a rebate on the embedded duties & taxes i.e. duties & taxes that are not available as credit or refund under any other scheme and thus reduce the cost for the exporters.
Pune should also take advantage of the various measures the central government is taking to foster international business. One of them is the Enhanced Trade Partnership (ETP) to be launched between India and UK later this year, to promote bilateral trade and investments between the two countries.
India and EU have also held discussions to restart the Bilateral Trade, Investment Agreement (BITA) which was suspended in 2013. A bilateral Regulatory Dialogue and an India-EU Multilateral Dialogue is also on the cards to explore further co-operation.
The Union Cabinet has also approved signing a Comprehensive Economic Co-operation Agreement (CECPA) between India and Mauritius to liberalise norms between the two countries.
Poland which is India’s largest trade partner and export destination in the Central European region, is also looking forward to collaborating with India in food-processing, smart cities and cyber security.
In 2020, Brazil and India had signed an MoU for cooperation in the field of Oil and Natural Gas, with an emphasis on biofuels and there is scope to extend these ties further. Along with this, defence and security are the central components in the Plan of Action for Brazil-India strategic partnership.
India is also working towards putting together a fresh India-US trade agreement. There is also a big scope for India to strengthen its trade relations with Australia.
Pune will play a major role in the export growth of the country, in the coming decades. Industrialists as well as policy makers should come together to unlock this potential and catalyse the process.
(Sanika is a Youth Fellow at MCCIA.)