India’s manufacturing industry is currently undergoing a transformative phase, presenting an opportunity for significant growth. With global supply chains undergoing changes, India stands poised to emerge as a significant player, offering an alternative manufacturing destination. However, swift action is necessary to achieve the ambitious objectives set forth.
The Government of India aims to elevate the manufacturing sector’s contribution to GDP to 25%, up from the current approximately 15%, as part of the Make in India initiative. The Economic Survey of India 2019-20 advocates for an export-led strategy focusing on product assembly and discrete manufacturing. This strategy emphasizes targeting industries where economies of scale and vertical integration can be achieved efficiently. Notably, existing industrial policies and fiscal incentives align with this goal, with eight out of fourteen sectors covered under the PLI focusing on high-growth product assembly.
Encouragingly, several sectors are already showing promise. For instance, auto component exports surpassed 30% of industry revenue in FY24, while electronics exports surged by 22.24%, crossing the $20 billion mark within three quarters of the year.
Signs of progress, such as the increase in exports, credit availability, and tax payments across both SMEs and large enterprises within these sectors, indicate their potential for further growth.
Enhancing Competitiveness
To enable Indian companies to compete globally, there’s a need to enhance ecosystem competitiveness. This entails focusing on improving long-term productivity through digital transformation and robotic automation, rather than relying solely on low wages or currency advantages.
The adoption of robotic automation in product assembly-based industries, particularly automotive and electronics, has been instrumental in streamlining operations, enhancing quality, and boosting productivity globally. This trend is gradually taking root in India as well.
According to the World Robotics Report 2022, countries with large manufacturing hubs, such as China, Japan, the US, South Korea, and Germany, account for the majority of global robot installations. India, while currently at a nascent stage, holds immense potential for growth in robotics, given the significant opportunities available.
Tailoring Automation Solutions for the Indian Market
Despite progress in India’s manufacturing sector, many automation solutions effective globally fail to meet the ROI criteria in the Indian context. There’s a need to strike a balance between fully customized solutions and generalized autonomy, tailored to suit Indian industrial applications at an affordable price point.
Moreover, the vision of increasing manufacturing’s contribution to GDP should extend beyond profitability. It should encompass improvements in productivity, the production of high-quality goods, and the creation of highly skilled job opportunities. Achieving these goals requires developing indigenous solutions for digital transformation and robotic automation, customized to India’s specific requirements and ecosystem.
Stay current with supply chain report news at The Supply Chain Report. For international trade tools, see ADAMftd.com.
#IndiasManufacturingGrowth #RoboticsAndAutomationIndia #TechRevolutionInManufacturing #IndianIndustryAutomation#SupplyChainNews
