India’s industrial production has undergone notable expansion, propelled by a thriving manufacturing sector. The Index of Industrial Production (IIP) mirrors this upward trajectory, underscoring the sector’s robustness and its ability to foster growth.
India’s manufacturing sector has emerged as a key driver of the nation’s industrial growth, contributing substantially to its economic trajectory. The Index of Industrial Production (IIP) serves as a barometer of this progress, highlighting the sector’s resilience and its potential for further advancement.
With a rising working-age population, India stands as an enticing investment prospect in the years ahead. Backed by favorable policy reforms, including incentives for domestic manufacturing, labor reforms, and improved business environment, India is poised to become a pivotal manufacturing hub. Forecasts indicate that India’s per capita GDP is expected to breach the USD 3,000 mark by FY25, signaling a promising economic outlook for the nation.
India’s manufacturing sector stands as a pivotal driver for economic expansion, employment generation, and technological progress. With rising income levels anticipated to fuel increased demand for manufactured goods, the sector is poised for significant growth. Investments exceeding Rs. 1.03 lakh crore through Production Linked Incentive (PLI) schemes have resulted in substantial direct and indirect job creation, totaling approximately 3,822,730 employment opportunities.
Aligned with India’s vision of self-reliance (Atmanirbhar Bharat), the implementation of PLI schemes across 14 sectors aims to bolster the nation’s manufacturing capabilities and export potential. These initiatives underscore the government’s commitment to fostering a robust and competitive manufacturing ecosystem, contributing to India’s economic resilience and global competitiveness.
Amidst a concerted effort from both the central and state governments along with listed corporates, the manufacturing sector in India has witnessed a substantial capital expenditure surge, totaling Rs. 21.6 trillion in FY23. This concerted push is expected to escalate further to Rs. 25.8 trillion in FY24, reflecting a robust commitment towards sectoral development. Notably, corporate leverage has reached a 15-year low, underlining a cautious yet favorable investment climate.
Furthermore, India’s strategic positioning in global trade dynamics is increasingly evident, with the nation’s share of US imports surpassing that of China. This growth momentum is complemented by India’s expanding presence in the global merchandise exports, currently standing at 1.9% as of December 2022, with domestic exports witnessing a positive upswing.
Driving this growth is a significant uptick in industrial production, with the manufacturing sector assuming a pivotal role. The Index of Industrial Production (IIP) reflects a positive trajectory, underscoring the sector’s resilience and its burgeoning capacity for expansion.
Government-led initiatives such as “Make in India” and the Production Linked Incentive (PLI) scheme have been pivotal in attracting investments, fostering innovation, and enhancing competitiveness within the manufacturing landscape. Leveraging a sizable pool of skilled and semi-skilled labor, these initiatives not only aim to address unemployment but also uplift the socio-economic status of the workforce.
Looking ahead, projections paint a promising picture for India’s manufacturing prowess. With an estimated working-age population of 1 billion by 2030 and the middle-class population poised to claim the second-largest share in global consumption, the potential for export growth is substantial. By 2030, India is expected to export commodities valued at $1 trillion USD, bolstering its standing on the global economic stage.
The manufacturing industry, currently employing around 27.3 million individuals and contributing 17% to India’s GDP, is set to undergo significant transformations. Programs like Make in India, Digital India, and Startup India have propelled sectors like Electronics System Design and Manufacturing (ESDM), attracting interest from luxury brands, auto manufacturers, and mobile phone companies to establish their manufacturing bases in India.
Moreover, initiatives like SAMARTH Udyog Bharat 4.0, launched by the Ministry of Heavy Industries & Public Enterprises, aim to enhance the sector’s competitiveness through advanced manufacturing and rapid transformation hubs. Collectively, these efforts are instrumental in driving the sector’s growth and fostering a transformative turnaround.