India’s manufacturing sector needs to own a lot more intellectual property (IP) not just to ensure robust sustained growth but also to ensure a competitive edge, according to Gauri Kirloskar, managing director, Kirloskar Oil Engines (KOEL), which clocked revenues of ₹4,073 crore in FY23. Gauri is the fifth-generation Kirloskar to join the business. She is the daughter of KOEL executive chairman Atul Kirloskar.

“If we look at India’s growth story that everyone is talking about, the growth story itself has led to an increased manufacturing output. But to be truly globally competitive we have to build our intellectual capital,” Gauri said at the India Science Fest in Pune. Currently, the manufacturing sector accounts for 17% of the GDP and employs over 27.3 million workers. The government is now looking at increasing the share of the output to 25% by 2025.

Incidentally, manufacturing exports hit a new high in FY23 at $447.46 billion, clocking 6.03% growth over the previous year’s $422 billion. KOEL, a leading manufacturer of diesel engines, farm equipment and generator sets, generated 12% of its turnover from international markets in FY23.

“When we manufacture engines, there is the option of tying up with a global company and getting a technology transfer and manufacturing the engine locally. Or you can design and develop it yourself, own the intellectual property and then manufacture in India. This is obviously the preferred option,” says Gauri.

The company has three main business segments: B2B, B2C and Financial Services. While the B2B businesses focus on internal combustion engines and related businesses, the B2C businesses focus on water management solutions and agri-related businesses and the financial services segment comprises of Arka Group.

With the market transitioning from petrol and diesel pumps to electric pumps, KOEL ventured into electric pumps through a minority stake in the Ahmedabad-based La-Gajjar Machineries (LGM) in 2014 and, last year, it made additional investments in LGM, making it a 100% subsidiary. The acquisition will help KOEL consolidate its footprint in the diesel and electric pump market through LGM’s Varuna and Raindrop brand of submersible and mono-block pumps.

B2B businesses

Manufacturing needs to create own IP: Gauri Kirloskar