| India’s manufacturing sector has never been so buoyant ever before as now. According to a research report by IBEF (India Brand Equity Foundation) manufacturing exports have traditionally grown between 5% and 10% pre–Covid-19 years, but exports have seen tremendous growth over the last two years, with a compound annual growth rate (CAGR) of 15%.
Sagar Gupta,
Director,
Ekkaa Electronics
India has reached US$ 418 billion of manufacturing exports in fiscal year 2022 (FY22). Among the key industries expected to propel India’s manufacturing exports are Chemicals, pharmaceuticals, electronics, automotive, industrial machinery, and textiles (among others) to enable India reach US$ 1 trillion by FY28.
The sector contributes 12% of India’s workforce and 15% of the nation’s Gross Domestic Product (GDP) respectively. The manufacturing industry in India is essential for a developing country like India, which relies on manufacturing for growth and development. The manufacturing sector is expanding and offers significant investment opportunities. There are several reasons why India is emerging as a core manufacturing industry.
MANUFACTURING – THE BACKBONE OF AN ECONOMY
The country’s economy is being driven by its rising competitiveness, greater import substitution and export potential, and rising global demand for Indian products. India’s expanding domestic market for manufactured goods is a result of the country’s expanding population. This domestic demand drives businesses to set up factories in the nation and the Indian government has also taken initiatives to improve the country’s ease of doing business and has simplified regulatory processes. This has increased the demand in the manufacturing industry and drawn international investment. Infrastructure investments such as roads, ports, and logistics have enhanced connectivity and lowered transportation costs for manufacturers.
In recent years, the Indian government has launched several programs to boost the manufacturing sector, including the “Make in India” campaign, which aims to increase the share of manufacturing in the country’s GDP and promote the growth of domestic manufacturing. The government is increasing its efforts to promote the manufacturing industry by offering a number of incentives and promotional programs to businesses, start-ups, and entrepreneurs.
India’s ample supply of raw resources makes it an especially appealing place for manufacturing firms and India’s low labour costs, which range between one-third and one-fifth of those in wealthy countries, add to its allure. Initiatives like the National Manufacturing Policy aims to increase manufacturing’s share of GDP to 25% by 2025, and the PLI scheme for manufacturing, which was launched in 2022 to develop the core manufacturing sector to global manufacturing standards. The manufacturing sector in India is steadily turning to more automated and process-driven manufacturing, which is projected to increase efficiency and boost production.
Emerging and innovative technologies are gradually accelerating change throughout the manufacturing sector. Indian manufacturing firms now have more opportunities to design goods and develop innovative solutions that could change the world.
The manufacturing industry in India is gradually shifting towards more automated and process-driven manufacturing, which is expected to increase productivity and efficiency. The “Atma Nirbhar Bharat” program, which was launched in 2020, also aimed to significantly strengthen domestic manufacturing.
Emerging and innovative technologies are gradually accelerating change throughout the manufacturing sector. Indian manufacturing firms now have more opportunities to design goods and develop innovative solutions that could change the world.
The manufacturing industry in India has gone through various phases of advancement. Approximately 16–17% of the GDP is contributed by this industry, which also employs close to 20% of the labour force. One of India’s sectors with the highest growth rates is manufacturing. The abundance of raw resources available in India makes it an especially attractive location for manufacturing firms.
INDIA’S STRONG-HOLD IN ELECTRONICS MANUFACTURING
India’s growth in the consumption of electronics, together with the Government’s vision of achieving USD 300 billion of electronics manufacturing by 2026 creates a unique opportunity for global firms to look at India as the manufacturing hub for electronics.
To further give a fillip to electronics manufacturing in the country, the Government introduced various schemes and initiatives to foster electronics manufacturing.
Schemes for Electronics Manufacturing in India
The Government’s Make in India, Digital India and Startup India have given the much-needed thrust to the Electronics System Design and Manufacturing Sector in India. The establishment of Electronics Manufacturing Clusters (EMCs) by the government was done to provide infrastructure, such as land, power, and connectivity, needed to draw in electronics firms. To promote an environment that is suitable for electronic manufacturing, these EMCs have been established in various states.
The Modified Special Incentive Package Scheme (MSIPS) and the Production Linked Incentive (PLI) scheme are two incentive programs introduced by the government to propel electronics manufacturing. These programs provide cash rewards to manufacturers who choose to produce particular electronic products in India. India is a desirable location for manufacturing because of its enormous pool of engineers, technicians, and skilled workers. India’s digital push and changing lifestyle choices are increasing the demand for more sophisticated electronics products.
India now occupies a significant position in the world’s electronics manufacturing sector. The nation is quickly evolving into a center for the production of electronics. The Production-Linked Incentive (PLI) plan is one of the main measures pushing India toward electronics manufacturing. The PLI plan offers companies rewards on additional sales from products made in India beyond the base year in order to promote domestic manufacturing and export of electronic devices. India’s expanding exports are evidence of the success of its electronics manufacturing sector. The fastest-growing export sector for India is electronics. The Production-Linked Incentive (PLI) scheme, in particular, has revolutionized the Indian electronics industry.
A sizable consumer market is found in India. In order to meet the expanding domestic demand for their products, many businesses are establishing manufacturing facilities in India.
India is putting an increased emphasis on research development and innovation. Innovation and the use of new technologies are encouraged through the creation of research institutions, technology parks, and incubators. The Digital India program encourages the use of technology in supply chain management, company operations, and manufacturing processes. The goal of this digitization effort is to increase manufacturing industry productivity and competitiveness. Sustainability and environment friendliness in manufacturing are becoming more and more significant in international markets, and many Indian manufacturers are implementing them. With digitization being a crucial component in gaining an advantage in this more competitive market, technology has now promoted innovation. The manufacturing industry in India is gradually shifting toward more automated, process-driven manufacturing, which is expected to increase productivity.
The growth of industrial clusters, the automatic route’s 100% FDI cap, the availability of bank financing, and other factors are boosting India’s manufacturing industry. India has an abundance of factories that are highly specialized and equipped with better, bigger, and more modern equipment. We now have more options for products and manufacturing capabilities as a result. Numerous elements, including effective supply chains, cost-effectiveness, design-oriented methods, and technology breakthroughs, contribute to the manufacturing sector’s enormous growth potential in India. To encourage the expansion of the manufacturing sector, the Indian government is spending a lot of money on creating a strong network of roads, trains, and transportation.
Today India has excellent home-grown electronics manufacturers making a wide-range of high quality electronics products like mobile phones, televisions, laptops and home appliances.
Due to the country’s rapidly growing population, the manufacturing sector in India has emerged as the fastest-growing industry. India has the potential to develop into a major hub for manufacturing.
