India’s demand for high-precision machine tools is rising: K Balasubramaniam

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India’s demand for high-precision machine tools is rising: K Balasubramaniam

India’s demand for high-precision machine tools is rising: K Balasubramaniam

Articles
Dec 09,25

In this interaction with Rakesh Rao, K Balasubramaniam, Founder, Tsugami Precision India, discusses the evolving machine tools landscape and the company’s role in shaping India’s manufacturing transformation.

India’s demand for high-precision machine tools is rising: K Balasubramaniam

In December 2025, Tsugami inaugurated a new assembly plant and foundry in Chennai with an investment of Rs 3 billion — the largest-ever commitment by a Japanese machine tool manufacturer in India. K Balasubramaniam, Founder of Tsugami Precision India and Chairman & Managing Director of Proteck Machinery India, has been steering the company’s growth since 2013. In this interaction with Rakesh Rao, he discusses the evolving machine tools landscape and Tsugami’s role in shaping India’s manufacturing transformation.

Could you brief us about Tsugami’s operations in India?

Tsugami India is a joint venture between Tsugami Japan and Proteck. Tsugami is a century-old manufacturer of CNC machine tools, known globally for high-precision equipment designed for small and intricate components. After World War II, the company reinvented itself by moving from watchmaking equipment to machines used for producing precision components for electronics, aerospace, medical devices and other advanced industries. Tsugami India began operations in 2013, initially on the Proteck premises in Chennai, before expanding into a dedicated foundry and assembly plant, both of which have been inaugurated on December 4, 2025.

What were the strategic considerations behind this investment? What does this new facility mean for your customers?

The investment is part of our long-term vertical integration strategy. The foundry will serve as a feeder for the assembly plant, allowing us greater control over quality, lead time and scalability. We believe that India’s demand for high-precision machine tools will continue to rise as manufacturing matures, and our consistent year-on-year growth reinforces this conviction. This investment positions us to meet future demand while ensuring that our customers experience a higher level of product consistency and service support.

At present, Tsugami India caters only to the domestic market. For our customers, this facility means precision machines built, serviced and supported entirely within India. Local manufacturing improves responsiveness, enhances service depth and allows us to tailor solutions faster. Compared to selling imported machines, this brings customers closer to the source, enabling them to scale efficiently while benefiting from improved ownership experience.

What are the key drivers shaping the growth of India’s machine tools industry?

The foremost driver is India’s expanding economy. A GDP growth rate of over 7 per cent signals robust manufacturing activity, and machine tools form the backbone of manufacturing sector. As industries shift toward higher-technology production at scale, demand for precision equipment will only increase. A strong machine tool sector is a hallmark of advanced economies, and India is now moving in that direction.

Which industries constitute Tsugami’s major customer base?

Our customer portfolio is diverse. We cater to industrial products, domestic appliances, medical device manufacturers and automotive suppliers. In medical devices, our machines are used to produce implants, dental components and other high-precision parts. In automotive, especially in fuel injection systems, we have a significant footprint. A major segment for us is electronics—particularly mobile phone manufacturing. Numerous components in smartphones, earphones and accessories are produced on Tsugami machines. Apple, for example, is one of the largest global users of Tsugami equipment. Additionally, our machines support civilian aerospace component manufacturing. The diversity of applications underscores the flexibility and capability of our technology.

Are you now seeing stronger traction from emerging sectors like electronics and aerospace?

Indeed. Even within automotive, electrification is creating significant new demand. Components used in electric vehicles, especially subsystems, are well-suited to Tsugami machines. Unlike many internal combustion engine components that require larger machines, EV components often fall within our scope. Electronics manufacturing continues to be a major growth driver, especially for small connectors and precision electronic parts. Wherever the requirement is precision, Tsugami finds relevance.

With digitalisation and automation accelerating, what technological capabilities have become essential for manufacturers to remain competitive?

Manufacturing efficiency is the key, and it is a function of process efficiency, machine availability and data tracking. Tsugami machines are engineered to consistently hold tight tolerances over long production runs, significantly reducing consumable usage and process variation. These factors contribute to superior efficiency. Our machines also provide the necessary data outputs for digitalisation initiatives—though the integration layer typically lies outside our scope and is managed by specialised software providers. Nonetheless, the data required for such systems is readily accessible from our equipment.

How does Indian machine tool manufacturing compare with other Asian countries?

Only a few countries possess the scale to sustain a mature machine tool industry. Among the top ten producers globally, India remains in the lower tier. China, meanwhile, is rapidly advancing. However, this disparity reflects India’s historical demand profile rather than capability. As demand grows, the industry will inevitably climb the value chain. Tsugami’s decision to invest here is based precisely on this expectation.

Electronics, aerospace and other precision-intensive sectors are expected to grow significantly, driving proportional demand for precision machining. While the overall machine tool industry in India may grow at around 10–12 per cent CAGR, Tsugami aims for 15–20 per cent, as the market shifts towards higher-precision machines where we hold a competitive edge.

Do China-Plus-One strategy and geopolitical uncertainties also contribute to this growth projection?

Yes, these are favourable developments for India. Tariff regimes affecting China and supply chain diversification strategies encourage multinational companies to relocate manufacturing to Asian markets, including India. Despite the rhetoric around re-shoring to the West, high cost structures make it impractical. Ultimately, production gravitates towards Asia, and whether India benefits depends on our collective ability to move quickly and intelligently.

What are the main challenges facing Indian machine tool manufacturers?

The biggest challenge is human resources—not capital or market demand. Machine tool manufacturing is seen as traditional, even unglamorous, compared to modern IT workplaces. This makes it difficult to attract young talent, and the industry remains predominantly male. Another challenge is the industry's reluctance to prioritise quality over pricing. This mindset prevents the development of truly world-class machines. Tsugami India, however, already operates at international standards.

How strong is the local ecosystem for components and accessories?

The Indian accessories ecosystem is surprisingly robust. However, certain critical components still need to be imported. Encouragingly, some global suppliers are establishing manufacturing facilities in India, including a major Japanese producer located near Chennai. This trend strengthens the supply chain and supports domestic machine tool production.

Are more Japanese machine tool companies expected to invest in India?

Yes, though the pace may be slower compared to Korean companies. Korea has a relatively small machine tool industry but is expanding its presence in India. It would be inaccurate to assume only the Japanese are investing here. Additionally, there is a challenge posed by some Indian players who import kits from China and reassemble them locally, which complicates market dynamics.

How will Tsugami contribute to India’s manufacturing transformation in the coming years?

Our most significant contribution will be in enhancing manufacturing efficiency and precision. Tsugami machines offer superior performance in high-volume production environments and deliver precision capabilities unmatched by equipment currently produced within India.

Are you planning further investments in India?

We have recently invested Rs 3 billion in the new foundry and assembly plant. Our focus now is on digesting this investment—meaning building systems, processes and capacity utilisation to leverage the infrastructure fully. Any additional investments will be balancing investments to optimise specific processes or address bottlenecks. Major new investment plans will follow only after the current phase stabilises.