In view of the rapid changes that are taking place in Indian economy due to the policy of liberalization and the fierce global competition, the Indian manufacturers have to adopt themselves to the changing scenario. Indian handicrafts and products from its rural industries have a large global market and can change the balance of payment positions of India. Also small and medium scale industries including ancillaries who are traditionally suppliers of simple and rough machined components are now being encouraged to involve themselves in highly sophisticated products. The main objective is to identify, develop and exploit new technologies that can bolster productivity, quality and commercial viability without costing the environment, i.e. to develop environment friendly engineering processes on the principle of agile manufacturing for which the best candidates are rural and medium scale industries of India.