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What is ancilarisation in Indian industry?
Ancillarisation in Indian industry refers to the practice of supporting and developing small-scale and medium-sized enterprises (SMEs) that provide ancillary goods and services to larger industries. This approach aims to enhance the supply chain, promote local manufacturing, and foster innovation by integrating smaller firms into the production processes of larger companies. By encouraging ancillarisation, the Indian government seeks to boost employment, improve competitiveness, and achieve balanced industrial growth across various sectors.
What are the advantages and disadvantages of ancillarisation?
AdvantagesMinimizes set up costLow level of InventoryEconomical SourcingBetter Quality StandardsComplementary RoleDevelopment of Entrepreneurial SkillsDisadvantagesÖ Dependence on parent company Ö ObsolescenceÖ Multiplicity of suppliers by parent companyÖ Securities like earnest money depositÖ Delay in receiving payments
