India's manufacturing sector is undergoing a transformative period, witnessing robust growth fueled by increasing domestic demand and the government's ambitious 'Make in India' initiative. Industry leaders and experts note a significant shift, with production capabilities expanding well beyond traditional sectors into high-tech areas like electronics, renewable energy, and robotics.
PLI Schemes Drive New Investment
According to Rahul Jain, India head of consulting firm BCG, production-linked incentive (PLI) schemes have been instrumental in revitalizing the manufacturing landscape over the past five years. While not universally successful across all industries, the schemes have spurred considerable investment in critical sectors such as electronics and renewables, marking a notable advancement from previous levels.
Furthermore, Indian companies are increasingly venturing into the production of specialized goods previously unavailable domestically. Ranjan Dhar, Director at ArcelorMittal Nippon Steel, highlighted plans to commence production of hot-forming steel in Hazira, a crucial component for manufacturing safer, lighter, and more environmentally friendly automobiles.
Precision Manufacturing and Robotics on the Rise
The country is also making strides in precision manufacturing. Noida-based company Addverb, for example, is manufacturing robots in India, a domain traditionally dominated by nations like China and Taiwan. Sangeet Kumar, CEO and co-founder of Addverb, explained that the company's decision to build every part in-house has enabled it to compete effectively on speed of innovation, a critical factor against global competitors.
The burgeoning domestic demand for these advanced products, particularly in areas like solar panels, batteries, and electronics, has directly contributed to the increased need for Addverb's robotic solutions.
Strong Domestic Demand and Export Ambitions
Beyond advanced technology, traditional sectors are also experiencing a surge. Anil Gupta, Chairman and MD of KEI Industries, which produces power cables, noted strong demand driven by investments in renewable energy (solar, wind), steel plants, oil and gas, and infrastructure projects like railways, metros, and highways.
Indian manufacturers are also setting their sights on international markets. KEI Industries currently exports 18-20% of its products to regions including Europe and the US, with ambitious plans to increase this share to 50% within the next 8-10 years.
Addressing Persistent Challenges for Sustainable Growth
Despite this positive momentum, experts emphasize that several 'speed bumps' need urgent attention for India to realize its full manufacturing potential. Rahul Jain of BCG pointed to challenges in the ease of doing business, specifically citing the complexities associated with land acquisition, labor laws, and varied, often lengthy, approval processes across states.
Skilled manpower remains another significant hurdle, as highlighted by Anil Gupta of KEI. Additionally, there is a consensus among experts on the critical need to boost investments in research and development (R&D) to foster innovation and maintain a competitive edge.
“Each sector, each company, anyone who has got capacity headroom available, those are the companies that will lead. If you fall short of capacity, you will miss the growth,” stated Ranjan Dhar, underscoring the importance of adequate production capacity to capitalize on rising demand.
Addressing these structural and operational challenges will be crucial for India to sustain its manufacturing growth trajectory and solidify its position as a global manufacturing hub.