India is set to become the next global machine tool powerhouse, likely to see substantial high-end machine tool manufacturing, even as China keeps its lead in lower end volumes.

In the last month, at least eight prominent firms have announced plans for joint ventures or wholly owned subsidiaries in India.

Industry experts say the phenomenon is linked to the spurt in manufacturing, for which the machine tool sector serves as the mother industry.

Manufacturing capacity in developed economies is stagnating and the growth rate for the machine tool industry falling. Hence, shifting machine tool capacity to low-cost high-skill geographies like India has become imperative.

President of Rosa Ermando SpA Ricardo Rosa said, "India has emerged as the nerve centre of the machine tool industry in Asia and its technological capabilities are far superior to many other Asian countries. Our JV with UCAM will manufacture a special category of machines, which hitherto were not made in India."

Added Roger W Cope, president, MAG Industrial Automation Systems, "We see the market for machine tools in India growing rapidly in the next few years. We are here because of its highly trained, efficient and skilled workforce."

Kennametal Inc, the $2.3 billion US-based supplier of tooling, engineered components and advanced materials, is  also shifting a part of its portfolio of manufacturing specialised machines from Europe to Bangalore in the next three years. This is being done to cater to automotive customers like BMW and Volkswagen that are expanding their operations in India.

The global majors want to exploit the huge demand-supply gap in the domestic market. Machine tool imports in 2005-06 stood at Rs 2,900 crore (Rs 29 billion), against domestic production of just Rs 1,342 crore (Rs 13.42 billion). The IMTMA has forecast 25-35 per cent CAGR till 2015.