Tooling in manufacturing has traditionally been treated as a narrow accounting exercise. However, experts argue that rethinking tooling economics integrating it into profitability models can transform global and Indian manufacturing. By aligning with GAAP and IFRS standards, companies can achieve margin stability, capital efficiency, and long-term competitiveness in a dynamic industrial landscape.
Across global manufacturing, tooling economics is being reframed from a compliance-driven cost to a strategic lever for profitability. According to CA CS Yogesh Bhatia, tooling recognition under US GAAP and IFRS frameworks offers more than accounting clarity it can evolve into a repeatable model for optimizing margins, EBITDA transparency, and pricing recovery.
For India, where manufacturing is rapidly scaling under initiatives like PLI schemes and Make in India, this shift is crucial. Treating tooling as a capital efficiency driver allows firms to balance revenue economics with operational resilience, ensuring competitiveness in both domestic and export markets.
By embedding tooling economics into strategic planning, Indian manufacturers can strengthen their role in global supply chains, reduce inefficiencies, and enhance investor confidence.
Key Highlights
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Strategic Shift: Tooling seen as a profitability lever, not just compliance.
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Global Standards: GAAP and IFRS frameworks enable margin stability and capital efficiency.
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Indian Context: Supports Make in India and PLI-driven manufacturing growth.
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Profitability Model: Enhances EBITDA clarity and pricing recovery.
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Future Outlook: Positions Indian firms for stronger global competitiveness.
Sources: Hindustan Times, MSN Manufacturing Insights