The manufacturing industry in India has been experiencing growth since 2006, especially over the past few years. Although India used to be famous for textile manufacturing, automotive, pharmaceuticals, and technology have also entered the game.
Even though the industry is facing some problems, it is changing. New technologies and a focus on helping the environment are making a big difference. This shift is creating new avenues for investment and growth in the country.
It’s vital to know about manufacturing to picture India’s industry future. This knowledge can spotlight the global benefits and chances it may provide. Read on to learn more and see the big changes happening in India’s manufacturing world.
Global Impacts For India’s Manufacturing
Shift towards a Self-reliant India (Atmanirbhar Bharat)
“When the world is in crisis, we must pledge — a pledge that is greater than the crisis itself. We must endeavour to make the 21st century, India’s century and the path to achieving this is self-reliance.”Prime Minister of India Narendra Modi
On 12 May 2020, India’s Prime Minister Narendra Modi made a big announcement. He started the Atmanirbhar Bharat Abhiyaan, or Self-reliant India campaign. He shared news of a large economic package to help fight COVID-19 in India. This package was for INR 20 lakh crores, equal to 10% of India’s GDP.
The goal is for the country and its people to be independent and self-sufficient. Prime Minister Modi listed five key areas for Aatma Nirbhar Bharat. These are Economy, Infrastructure, System, Vibrant Demography, and Demand. The Finance Minister also shared plans for reforms and support in seven sectors under this campaign.
Growth in the Electronics Manufacturing Sector
Lately, there’s been an increasing trend in electronics manufacturing in India. This is happening due to incentives from the Indian government and the desire of companies to diversify their supply chains from China. Narendra Modi, the Prime Minister of India has set a financial goal of 300$ billion of electronics manufacturing by 2026. This proves the continuous growth in India’s Manufacturing and the possibility of worthy investments.
FTA (Free Trade Agreements) and Regional Trade Agreements:
It is known that the Prime Minister of India is negotiating with the UK about a new Free Trading Agreement. India’s Prime Minister doesn’t seem to rush to close the negotiations, as he prefers a more detailed framework. The Round 13 of India-UK FTA discussions began on September 4. The results of these negotiations are yet to be seen. Although there are assumptions that the FTA agreement won’t be finalized until 2024 as the upcoming elections will be a priority for both parties.
Digitalization is one of the most significant technological achievements. The entire value chain is now using a mix of sensors and IT systems for automation. Automation will allow for a more flexible, efficient, and fast process. Manufacturing companies can use this to create better-quality items at lower costs by examining machine data.
India can easily speed up its change into a global manufacturing leader. Merging innovative production technology and automation with India’s low-cost labor can easily result in very profitable results.
Evolving Skill Needs For Manufacturing In India
Maruti Suzuki’s pioneering efforts
Maruti Suzuki India Limited (MSIL), a branch of Suzuki Motor Corporation in Japan, is the biggest maker of passenger cars in India. Companies like them represent the automotive industry and have a crucial role in shaping India’s manufacturing landscape.
Maruti Suzuki has also played an important role in introducing innovative approaches. He introduced advanced mass production techniques, local manufacturing, skill development, and cutting-edge technologies. All these efforts have had a transformational impact on India’s manufacturing industry. They also create many employment opportunities adapted to the new standards.
New Strategic Opportunities For India
China Plus One Strategy
In the last few years, many companies have begun using a new strategy called “China Plus One” or C+1. This strategy involves companies building new factories in countries other than China. This trend is gaining popularity for several reasons.
Here are the main reasons why the “China Plus One” strategy started:
- Costs: Companies are looking for cheaper places than China to produce goods.
- Risk: Companies avoid relying only on China due to potential trade and policy issues.
- New Markets: Producing in other countries can make selling products in those countries easier and cheaper.
- Closer to Customers: Making products closer to customers lowers costs and speeds up delivery.
- Talent and Innovation: Companies move to other countries to access skilled workers and advanced technology, improving their products.
But, there are also new problems. For example, some global tech companies have left China or cut down their work there. This is because China has strict rules about data privacy.
Why C+1 Is Beneficial For India
The China Plus One strategy holds significant promise for India. As businesses worldwide seek to lessen their dependency on China for production and sourcing. So what’s a better alternative than India?
India’s growing economy, workforce, and infrastructure make it an ideal option for companies looking to expand. Additionally, India’s government is actively encouraging companies from other countries to invest there. They are offering benefits and making rules easier to draw in big international companies.
In using the China Plus One strategy, companies can take advantage of India’s many benefits. This will certainly allow for more varied and strong manufacturing and supply chains.
Use Megaventory To Manage Your Inventory
Opening up a new manufacturing site and managing it can be difficult. By using Megaventory as your chosen ERP software, you can easily manage your stock in different locations. One of the biggest benefits of Megaventory is that it’s on the cloud. As follows, it’s easy to use, affordable and accessible at all times- even from your smartphone!
Advantages Of Manufacturing In India
1. Strong Demand
Manufacturing exports in India have hit an all-time high, signaling a high global demand for Indian-manufactured goods. This significant milestone underscores the increasing worldwide reliance and trust in India’s manufacturing capabilities and output. This amplifies India’s role as a critical player in the global manufacturing landscape.
2. Growing Investment
The expansion in manufacturing and the surge in investments emphasize the significant growth of the sector in India. This development is an indication of the increasing confidence of investors in the Indian manufacturing sector. As the sector grows and branches out, it strengthens the country’s economy. It’s also a promise of more improvements in technology, infrastructure, and job opportunities in many manufacturing industries.
3. Government Backing
These government-led programs, such as PLI and Make in India, are clear indicators of India’s dedication to establishing itself. The Indian government actively wants to promote innovation and expansive growth. That’s why it’s constantly working to draw in investments from both domestic and global sources. Businesses thrive by constantly boosting the manufacturing sector and implementing new, helpful regulations.
This strategic approach augments the country’s production capabilities. It also contributes significantly to economic growth and job creation. As a result, it reinforces India’s position on the global manufacturing stage.
4. Advantageous Position
Positive changes in manufacturing and strong support from policies and investments put India on a path for long-lasting economic growth. India is actively working to boost its manufacturing sector, making it a good place for investment. As a result, this boosts the growth of existing industries and helps new ones to start, ensuring broad and lasting economic progress.
Top Regions To Start Manufacturing In India
In order to prove to you that India is one of the best and upcoming places to invest in manufacturing we gathered more information for you.
Mumbai ranked as the 12th richest city globally, stands as the center of finance, trade, and entertainment in India. This city contributes up to 5% of the country’s GDP and oversees 70% of its capital transactions. The Jawaharlal Nehru Port, commonly known as JNPT, holds the title of India’s biggest container port. Just so you get the picture, the port is handling 40% of the nation’s container volumes. Additionally, the corridor between Mumbai and Aurangabad is home to numerous IT, pharmaceutical, textile, and consumer durable units. Lastly, Aurangabad is on the rise as a significant center for automobile manufacturing and engineering. This would give you the chance to be one of the first to invest and take advantage of the situation.
Pune’s industrial zones are well-known manufacturing centers for the automobile, consumer durables, and IT and engineering sectors. It also accounts for nearly a fifth of India’s industrial investment. Pune is India’s most evolved automobile ecosystem, hosting firms from Germany, America, Korea, and China. Furthermore, the city is a leading area in India for the growth of light industrial parks and warehouses. Other key sectors in the area include pharmaceuticals and food processing.
Noida holds the title of India’s largest electronics manufacturing zone. For starters, it contributes to 40% of the country’s mobile manufacturing and over half of the mobile component production. Additionally, this zone is home to the largest collection of Chinese factories in India, with a significant Korean and Japanese presence as well. The region also hosts other kinds of operations, and it’s estimated to host Jewar International Airport by September 2024.
For the past few years, India has been evolving rapidly. The manufacturing landscape has also followed this change and it has been developing as well. New opportunities, infrastructure and policies are guiding new leads in the country. The nation also promotes initiatives like “Make in India” in order to become a manufacturing powerhouse. It also welcomes foreign investments with favourable policies to new manufacturing businesses. Additionally, there a lot of new skills and strategies emerging, setting new standards for the country. Lastly, we need to mention that there are a lot of different regions to set your business up, each one with different characteristics and benefits. It seems that India is full of upcoming opportunities.
Vasilina Maglara is a Digital Marketer from Greece. She works at Megaventory, a company that makes ERP software for medium-sized businesses. Eager to learn and grow, Vasilina is helping Megaventory and its customers succeed through effective marketing and content creation.