Sanjeev Sanyal, a prominent member of the Prime Minister's Economic Advisory Council, asserted that India's manufacturing progress cannot be accurately gauged solely by its share of the Gross Domestic Product (GDP). Speaking at Business Today’s India@100 session, Sanyal emphasized that while manufacturing consistently accounts for roughly 16% of India’s GDP, this proportion masks significant absolute growth within a rapidly expanding economy.
India's Manufacturing: Beyond the Numbers
Sanyal addressed concerns regarding the seemingly stagnant 16% manufacturing share, explaining that this figure represents a stable proportion within a dynamically growing national economy. Consequently, the manufacturing sector itself is undergoing substantial expansion, even if its relative contribution to GDP remains consistent. He pointed out that India's industrial capabilities are 'radically bigger' today than they were a decade ago, with the sector's composition also evolving considerably.
The nation has emerged as a global leader in several manufacturing domains. For instance, India is now the world's second-largest producer of steel, with an annual output of approximately 160 million tonnes, significantly surpassing the US's 80 million tonnes, though still behind China's 960 million tonnes. Similarly, India has become the second-largest producer of mobile phones globally, a sector that was virtually non-existent in the country just ten years prior.
Key Growth Engines: Steel, Electronics & Shipbuilding
Shipbuilding: A Strategic Imperative
Sanyal identified shipbuilding as a critical emerging sector with immense potential for India. He highlighted that the country possesses all the necessary ingredients for a thriving shipbuilding industry, including abundant steel production, a young and skilled workforce, an extensive coastline, robust design capabilities, and strong domestic demand. He stressed the geopolitical vulnerability stemming from India's over 90% reliance on foreign ships for its imports and exports, deeming it the nation's single biggest economic risk.
Recent policy reforms, such as granting infrastructure status to shipping and improving access to long-term finance, have already begun to revitalize the industry. Indian shipyards are now receiving orders several years in advance, and global players like Hyundai and Mitsubishi have expressed interest in establishing operations in India. Sanyal predicted that India could become a significant global player in shipbuilding within five to six years.
Fostering Innovation and Resilience
Reflecting on global supply chain shifts, Sanyal noted a move from a 'just in time' to a 'just in case' model, driven by lessons from the COVID-19 pandemic and other disruptions. He argued that India must transcend merely importing technology or relying on joint ventures. Instead, the country needs to cultivate the confidence and capability to innovate and build at the 'cutting edge'. India's manufacturing future, he concluded, will hinge not just on policy reforms but also on a cultural transformation towards greater risk-taking, innovation, and original research.