Made in India: Reporter Chris Nelson photographed this made-in-India manhole cover outside INDIA New England's offices in Waltham, Mass.

WALTHAM, Mass. — India has long been recognized as a global hub for the IT, pharmaceutical and textile sectors. But in recent years, the country has emerged as a major producer of iron and steel products, particularly manhole covers. India's metal-casting industry is receiving considerable attention from foreign municipalities and public utilities that want to save money on publicly financed projects like road construction. And much of this attention is coming from the United States.

Every year, American municipalities and utilities purchase thousands of Indian-made manhole covers at prices considerably lower than those charged by American foundries. The list of cities that have purchased Indian-made manhole covers includes Los Angeles, New York, New Orleans and Phoenix. 

The trend is not new — Indian foundries have been exporting manhole covers, sewer grates, water meters and a range of other metal castings to the United States for nearly four decades — yet demand for Indian-made castings has increased significantly in recent years, partly because the soaring cost of steel and other building materials has forced municipalities to tighten their budgets, but also because of a general decline in the American industrial-manufacturing sector that began in the 1960s and continues today.

"Laborers' wages have increased, along with benefits, to the point where it has become very expensive for American foundry-men to run their businesses," said Lane Urbas, vice president and treasurer of Roman Stone Construction Co., a Bay Shore, N.Y.-based firm that manufactures pre-cast concrete products, including manhole "vaults" (the silos upon which manhole covers sit), at its Long Island factory. "As labor and manufacturing costs have continued to rise, it became a more attractive proposition for American foundries to augment their business with products made overseas. Other foundries were bought out or simply closed down."

 The company sells its manhole vaults, along with cast-iron manhole covers made by an Indian foundry, to cities and utilities across the northeastern United States.

Indian foundries typically sell their manhole covers for about one-third to one-half the cost of those produced in American foundries. The heavy iron lids, which weigh on average about 100 pounds, vary widely in price — basic manhole covers can cost as little as $75, while the more artistically designed lids can easily top $300 — but the majority of manhole covers fetch about $100. The cost to ship the lids between the two countries can add up quickly, but this is usually offset by India's low labor costs. "The Indian foundries can sell their manhole covers for so much less because the workers who make them earn the equivalent of a few dollars a day," Alfred Spada, communications director for the American Foundry Society Inc., an industry trade group, said. "In contrast, foundry workers in the United States earn about $25 per hour, plus benefits. Right there, the Indian foundries have a pretty big advantage over the American foundries."

India's metal-casting industry young, but growing rapidly

The Indian metal-casting industry originated nearly 70 years ago in Howrah, an industrial city in West Bengal, and later spread to Punjab, Gujarat, Maharashtra and Tamil Nadu. Today, Indian foundries operate in dozens of towns and cities across the country, according to the Indian Institute of Foundrymen, a Kolkata-based trade group with 3,200 members. The majority of these plants are categorized as small and depend mainly on manual labor, while the larger foundries are semi- to completely automated.

The foundries are struggling to keep up with the soaring worldwide demand for their castings. The Foundry Informatics Centre — a unit of the Institute of Indian Foundrymen — projects that the country's metal-casting output will increase by 20 percent over the next two years, while the institute estimates that Indian foundries need about $3 billion in upgrades to accommodate this increased output.

India's booming economy is fueling much of this demand — as the country continues to modernize, its towns and cities are investing huge sums of money to upgrade their infrastructure — but the United States accounts for a large percentage of the industry's growth, too. American municipalities and utility companies that purchase Indian-made manhole covers usually do it via middlemen who contract with foreign manufacturers. 

Such is the case with Roman Stone Construction Co., which won a contract in 1995 to supply Con Edison with manhole covers several years ago after the American foundry that had been working with the utility was unable to meet the obligations of the contract.

"Con Ed knew that we had a day-to-day supply of manhole covers on hand, so they asked us if we could provide them with some covers to get them out of the jam that they were in," Roman Stone's Urbas said. "It was a bit of an emergency situation for them, because the American foundry they had contracted with had gone out of business and did not alert them that they wouldn't be able to make their delivery. We've done business with Con Ed ever since then, primarily because we were able to connect them with the casting company that we use."

Roman Stone subcontracted with Howrah-based Shakti Industries Pvt. Ltd. for manhole covers. This relationship was facilitated by Creswell Trading Co. Inc., a Bryn Mawr, Pa.-based firm that acts as a sourcing agent and importer of metal castings manufactured by foundries in India and China for industrial and municipal customers in the United States. The company does not manufacture any products, nor does it publish or distribute a catalog; rather, it arranges contracts between its American clients and Indian and Chinese foundries.

Working conditions cause backlash

By purchasing its manhole covers from an Indian foundry, Roman Stone saved a considerable amount of money — and satisfied Con Edison. Then an article detailing the miserable working conditions inside Shakti Industries' Howrah foundry appeared in the November 26, 2007 New York Times. The story — which featured images of wiry-thin men stripped to the waist handling molten metal without shoes or eye protection — caught Roman Stone and Con Edison off guard.

"The photos were very disturbing," Michael S. Clendenin, a Con Edison spokesperson, said. "We take worker safety very seriously."

The story prompted Con Edison to revise its international contracts to include safety requirements; the utility now requires overseas manufacturers to "provide a safe and healthy workplace," and to follow local and federal guidelines in India, according to Clendenin, who said that Con Edison had no plans to cancel its contract with Roman Stone. But Urbas disputes that — he said the company has been left in limbo ever since the New York Times published the story, and that Shakti Industries has been forced to shut down its foundry and lay off its workers.

"I would like to say that the day after the Times ran that story, the foundry in India that we buy our manhole covers from shut down and several hundred Indian workers lost their jobs," he said. "It has affected those workers, their families and our company; every day that we can't get manhole covers from our supplier in India, we are losing revenue that has helped us stay in business."

Roman Stone president Tom Montalbine said the Con Edison contract did not include any provisions mandating safe working conditions at the foundry where the company purchased its manhole covers. "There were no standards in the contract — Con Edison, just like all utilities, is only looking for the lowest bid," he said. "Fortunately, there are some foundries in India that are modern and meet minimum safety requirements, but there are many more foundries that are operating in prehistoric conditions."

Though Indian law mandates that all factories operating in the country provide their workers clean and safe working conditions — the 1948 Factory Safety Act addresses cleanliness, ventilation, waste treatment, overtime pay and fresh drinking water — the only protective gear that it specifically requires is safety goggles. 

Pratap Chatterjee, program director and managing editor at CorpWatch, a San Francisco-based organization that investigates and exposes corporate violations of human rights, environmental crimes, fraud and corruption around the world, attributes the poor working conditions in Indian factories to lax enforcement of the Factory Safety Act and ignorance on the part of the buyer.

"The problem begins with enforcement of the law — you can have a rule that prohibits pollution or smoking, but it doesn't mean anything if the authorities do not enforce it," he said. "So, in the absence of enforced regulations, it is up to the cities and utilities that buy these manhole covers to ensure that they are made in safe working environments. Clearly, however, this is not happening — Con Edison claimed it had no knowledge of the working conditions at the [Shakti Industries] foundry, but they are completely guilty in this situation.

"Fair-trade practices are generally more expensive because they distribute a larger chunk of the profits to the workers," Chatterjee said. "So, by purchasing cheaper manhole covers from an Indian foundry, Con Edison essentially circumvented U.S. law by purchasing from an Indian company that does not have safe working conditions in place."

U.S., Indian metal casting headed opposite directions

The U.S. and Indian metal-casting industries are headed in opposite directions, according to data from the trade journal Modern Casting. 

The magazine issued its annual Census of World Casting Production survey last December, providing an in-depth look at the global metal-casting industry for 2006. Among the findings:

• India's 4,750 active foundries provide direct employment to more than 500,000 people and indirect employment to another 150,000 Indians. In 2006, Indian production of metal castings soared 17.5 percent to 7.2 million tons, continuing a trend of double-digit growth: over the last six years, Indian foundries have more than doubled their production of castings.
  
• The U.S. metal-casting industry is roughly half the size of India's in terms of the number of workers — America's 2,170 foundries employ more than 220,000 people, but they are far more efficient. In 2006, U.S. foundries produced 12.5 million tons of metal castings, reflecting a 3.4-percent decline from 2005 and the first time in four years that American production did not grow. The number of American foundries — which stood at 2,336 in 2005 and 3,300 in 1990 — has fallen steadily since peaking at 6,000 in 1955. The American Foundry Society attributes this to increased competition from foreign foundries, strict workplace and environmental regulations imposed by the U.S. government, and an increased emphasis on services rather than manufacturing in the United States.
  
• Currently, China leads all nations in terms of the number of metal-casting plants and overall production. According to the American Foundry Society, the country's 26,000 foundries produced more than 28 million tons of iron, steel, aluminum and various other metal castings in 2006, representing approximately one-third of overall global production. The United States ranked second, followed by Japan, Russia, Germany and India.