German industrial giant Siemens is looking to contribute to the training of half a million Indian students over the next three years as part of a deal between Berlin and New Delhi.
Siemens has 13 factories in India and since 2015 has been running a vocational education and training (VET) program in Mumbai with courses for fitters and electricians. It has so far been training 13,000 students per year.
Bosch, another German manufacturing powerhouse, has 18 plants in India and earlier this year stepped up its commitment to vocational training in the country by launching a skills development center in Bangalore. The center includes labs for mechatronics, modern manufacturing, modern carpentry as well as two consumer electronics labs developed in partnership with Samsung Electronics.
India is seeking to emulate the German system of vocational education and training, under which students spend 80 per cent of their time at companies under the watch of corporate trainers and 20 per cent learning theory in vocational schools run by state governments. The Siemens deal was one of five agreements relating to education and training that were signed during German Chancellor Angela Merkel's trip to India in November 2019.
"India lacks the many highly skilled workers below the academic level it takes to meet Prime Minister Narendra Modi's aim of lifting the country's quality as an investment destination," said Rahul Oza, a Pune-based partner with professional services company Roedl & Partner.
"I have often heard from our clients that they cannot deploy sophisticated manufacturing equipment such as five-axis CNC lathes in India because Indian engineering college graduates are not capable or willing to operate them, and German-style vocational training for mechatronics fitters does not yet exist here," he added.
K.P. Krishnan, India's minister for skills development and entrepreneurship, who signed the agreement with Siemens and Germany's ministry of economic cooperation and development (BMZ), has criticized India's private sector for not taking vocational training certification seriously.
Krishnan said India's private-sector training institutes are inferior to government-run centers as they lack quality labs and equipment. A BMZ spokeswoman said India lacks exchanges between the private and public sectors needed to craft training courses tailored to market needs.
India, a country that suffers high youth employment, is keen to improve the quality of its workforce. In 2015, the government launched its Skill India Program, aimed training 400 million people in various skills by 2022.
The German ministry is advising Indian government agencies on VET in six industrial clusters - the automobile component cluster in Aurangabad, Maharashtra state; the electronics cluster in Bangalore, Karnataka state; the energy-efficient construction cluster in Bhiwandi, Maharashtra state; the retail and e-commerce cluster in Mumbai; the solar energy cluster in Pune, Maharashtra state; and the pharmaceutical cluster in Hyderabad, Telangana state.
The Indian government plans to expand the scope to 100 clusters with 14,000 small and mid-size enterprises involved, the BMZ spokeswoman said.
Harald Smolak, a former Siemens vice president of sales and the current human resource director of interim management-provider Atreus, said the agreement is useful because Siemens does most of its business abroad.
"The conventional practice of flying in a foreman from Germany whenever a production line has issues is expensive," Smolak said. "And locally trained foremen contribute to the development of locally available skills much more than the expat would.
"Another rationale of local training is that bringing local people to Germany for extensive training raises the risk of them not going back to their home countries, instead applying as skilled specialists for other options outside the company."
Other analysts link Germany's VET pitch to India to an upcoming German migration law that will open the country's job market to mid-skilled immigrants with a vocational training background.
The Skilled Immigration Act, to be implemented in March, was drafted because Germany faces a shortage of tens of thousands of such workers.
While a Blue Card program implemented in 2011 has opened Germany's job market to non-European Union foreigners with university degrees, the new law will offer the same privilege to skilled foreigners without academic degrees.
International immigration company Fragomen says the process can be set in motion by a prospective future employer in Germany while reducing the processing times of the immigration authorities. It will also grant privileged access to visa appointments at German representations abroad.
"The new law will make it much easier for Indian recipients of vocational training to come to Germany," said Frank Karcher, Tata Consultancy Services' HR manager for Central Europe. "And I expect their number to grow substantially as a result."