How Future Ready is Indian Manufacturing?

As India gears up to build its manufacturing sector into a global powerhouse and also touch the 5 trillion mark, it is important that the Indian industry also rises up to meet the challenges of this scale up. Competitiveness, innovation, technology adoption and the ability to continuously adapt to a dynamic global environment will be the key for this scale up and it is important to see how future ready Indian manufacturing is in this context. 

Global manufacturing has gone through a significant tectonic change with shifting hubs of manufacturing due to geopolitical reasons and rethinking of supply chains. This offers a significant opportunity to India to scale up its manufacturing potential and become a global and preferred manufacturing destination. 

Initiatives to boost manufacturing 

India’s strategic location and robust policy has helped boost manufacturing levels in India. Launched in 2020, the Production Linked Incentive (PLI) Scheme has generated ₹12.50 lakh crore in production value and 9.5 lakh jobs in various sectors and given a push to manufacturing in electronic, pharmaceuticals and automotive industries, among others. 

Indian Semiconductor Mission is poised to position India as a hub for not only

‘Made in India’ mobile devices, but chips as well. India’s success in defence and space technology has made it a leader in space tech with ISROs capability to innovate and implement technology at low-cost being a global attraction. 

As the Indian government works in mission mode to increase manufacturing and robots quality ecosystems, the number of Quality Control Orders (QCOs) has also been ramped up to establish India as a manufacturing powerhouse with best-in-class quality products.

How can Indian Industry scale up its competitiveness and capabilities?

Industrial Ecosystems 

Supportive labour, logistics, infrastructure, land, and industrial policies help form a cohesive industrial ecosystem that attracts more investors and industries. Currently, there is a disparity within Indian states in terms of setting up such industrial ecosystems and there is a need for uniformity and regular reorganization of policies. States need to improve the way land is optimally used, reclaimed, and reallocated. Land pooling systems must also be put in place to enhance the land available for setting up industries. The Indian workforce must also be formalized for better social security measures and economic stability. 

Go Local 

The continued thrust on Vocal for Local movement is also key to ensuring a more competitive and capable manufacturing sector in India. India should also leverage indigenous innovation and strengthen local supply chains for faster production cycles and reduce dependency on imports. Benefits and regulatory frameworks should be incentivized for local players to help resolve issues and get inputs from local players, leading to strong regional manufacturing hubs.

Use of Technology and Innovation Strategy 

Today, AI is a key disruptor and a very critical technology that can be tapped to advance manufacturing. The combination of emerging technology with 5G also holds the potential to transform manufacturing in India. 

There is also a need to strengthen the country’s innovation ecosystem further by aligning innovation strategy with the manufacturing industry. For this, Indian manufacturing industries will have to transition from a factor-cost-driven advantage to a more sustainable, investment and innovation-driven model with implications on factor requirements, cost structure, and perpetuity levels. 

Academia and Industry Collaboration 

With one billion working force by 2030 and a huge demographic dividend, the question is if India is ready to nurture and capture the potential. For this, education, research, and skill development must be accelerated, and the industry and academia must come together to ensure an employable youth. Review of curriculum, more investment in research and development, and industry experience must be emphasized to achieve this goal. 

The CII Centre of Manufacturing Excellence established in 1997 has been an instrumental player in bridging this gap between academia, government, and industries and bringing together all stakeholders to increase the manufacturing efficacy of the country as a whole. It also provides education and training for manufacturing industries through regular workshops, conferences, and reskilling and upskilling programs for professionals. To enhance manufacturing competitiveness, the CII Centre of Manufacturing Excellence has been key in building the narrative of Indian manufacturing. 

The efforts of the Indian Government to transform this sector are visible in the growth of GVA (Gross Value Added) in the GDP.  As per a study by CII – ‘Champion Manufacturing Industries 2025’, ramping up manufacturing in aerospace & defence, cement, auto & auto components, chemicals, engineering, pharmaceuticals, steel, and textiles is essential for India to emerge as a global manufacturing hub. Every job created in manufacturing has a multiplier effect in the services sector and in India where employment generation is a critical issue, manufacturing becomes a key sector for inclusive growth. The Indian manufacturing story is unfolding, the only question is how long it will take and how well India can seize the opportunities available.