INDIAN MANUFACTURING SECTOR AT ENGIMACH 2021 – A SHINING LIGHT

INDIAN MANUFACTURING SECTOR AT ENGIMACH 2021 – A SHINING LIGHT

The Indian industrial manufacturing sector has emerged as one of the highest growing sectors in India. It has developed through various stages over time since independence in 1947. From building the industrial foundation (1950-60) and the Licence-Permit Raj (1965-1980) to the liberalization (the 1990s), it has a strong foot in global competitiveness with a scope of expansion.

Indian Manufacturing Sector Today

While several companies are engaged in the manufacturing of machinery, equipment, electronics and electrical products, many are into building and construction material, rubber, plastic and metals products and automation technology products. We stand at the turning point of our economic regrowth, with the industry being the ladder to it. New companies are budding and growing in the Indian market every day. The sector contributes 14% to the Indian GDP and employed 12% (2014) of the country’s workforce. 

To demonstrate, as per the annual national income published by the government, the Gross Value Added (GVA) at the basic current prices from the manufacturing sector in India grew at a CAGR of 50% between FY16 and FY20. It has an estimation of $397.14 billion in FY20PE. According to the Ministry of Statistics & Programme Implementation, India’s industrial output rose by 3.6% y-o-y in October 2020. Merchandise export decreased 4.78% y-o-y to reach US$ 314.31 billion in FY20; the PMI (Purchasing Managers’ Index) stood at 58.9 in October 2020 from 56.8 in September. The data is signifying strong growth in the manufacturing sector, despite losing traction.

Records also reflect strong growth in the production of basic metals (10.8%), intermediate goods (8.8%), food products (2.7%) and tobacco products (2.9%). Global giants like GE, Siemens, and Toshiba have set up new manufacturing plants or are raring to. They hold an increasing capacity to spend to localize their offers. Companies including Samsung, Foxconn, and Wistron Corp., have also pledged $1.5 billion worth of investments. India will soon have their mobile phone factories set up on our lands.

Scope of Growth for the Indian Manufacturing Sector

Engimach - Manufacturing Sector and the 3Es

When COVID-19 led the world to a setback with its economy, the Indian manufacturing sector generated 17.4% of India’s GDP. The triple play of 3Es – Economy, Employment and Efficiency - are the key push to the sector. India needs a sustainable growth in its manufacturing employment, but at a sharp fall with about 2 million jobs lost. The sectors can achieve inclusive growth by having each job leading to 2-3 jobs in the services.

The gap between the skilled workers and the requirement to perform new tasks is yet a path to declination. Job Opening and Labor Turnover Survey states the opening rates to have nearly doubled, while the construction industry employing low-skilled labour saw a minimal growth of 0.17% over the same.

Cross-regional migration and mobility restricted by the pandemic have made job seekers hesitant to move in search of jobs. Vacancies, relatively, remain unfilled for a long time due to lags in supply chain management, transportation, production planning and maintenance. Since most of these are still bouncing back, the large labour pool of employment is filling.

Government Initiatives for Manufacturing Growth

Important to realize, manufacturing is rightfully at the centre-place of the GOI’s vision for Make In India (MII). This could result in an increased contribution to GDP to 25%. This pandemic is a period of opportunity revitalized under the crisis; it’s time we claim our place in the world by becoming the global epicentre for hi-tech manufacturing to inherit growth. While presenting the Union Budget 2021-22, Union Finance Minister Nirmala Sitharaman gave the sector a push. The Finance Minister committed an infusion of ₹1.97 lakh crore into the sector.

The government’s Performance Linked Incentive (PLI) scheme has the capacity of creating approximately 1.40 crore man-months of additional workers. The government has implemented other initiatives like reduction in Corporate Tax Rates where the tax rates for corporates would be now payable at 22%.

ENGIMACH-2021 | Reviving Manufacturing Growth

Notedly, growth in manufacturing is crucial for India’s economic development. It holds the potential to provide large-scale employment to the young population enabling a significant section to move out of poverty. By 2030, the Indian middle class is expected to have the second-largest share in global consumption, and it can help the country achieve its manufacturing potential as it looks to benefit from its demographic dividend and a large workforce over the next two to three decades.

As the market keeps unpredictably pacing towards growing, it is the need of the moment to stay cognizant of the on-goings. K and D Communications brainchild – ENGIMACH, offers a launchpad for new ideas, products and services, and a conducive environment for forging joint ventures and collaborations with over 1,00,000 business visitors, corporate intrapreneurs, savvy technocrats, ancillary producers, product manufacturers and beneficiaries in the Engineering & Machine Tools Industry.

Register for ENIGMACH 2021

Register for ENGIMACH 2021 to follow the trends, innovations and developments in the engineering and machine tool industry.