Make in India is crucial to fostering investment, facilitating growth, enhancing skill development, preserving intellectual property, and developing best-in-class manufacturing infrastructure within the subcontinent. Broadly speaking, it is poised to create positive long term structural changes to the very fabric on the Indian manufacturing landscape.
The Make in India initiative covers under its ambit 25 major manufacturing sectors of the Indian economy including automobiles, IT, chemicals, and electronics. Governmental efforts to increase investment by enabling single-window clearances, increasing FDI investment limits and significantly cutting down red-tapism has been undertaken to maximize on job-creation. The ultimate objective is to make the Indian manufacturing sector self-reliant and competitive in the global market.
The manufacturing sector is vital for job creation and skill development, thereby enhancing productivity and consequently boosting overall economic growth.
As per the IBEF report, the Indian Manufacturing Purchasing Managers Index (PMI) reached 48.1 in June 2021 from 50.8 in May 2021.
The manufacturing component of IIP stood at 117.2 between April 2020 and March 2021. In May 2021, the industrial output indices for the mining, manufacturing and electricity sectors stood at 108.0, 113.5 and 161.9, respectively.
According to the latest survey, capacity utilization in India's manufacturing sector stood at 66.6% in the third quarter of FY21.
The rise of the manufacturing sector
Previously a dominant feature in job creation, the agricultural sector, is no longer able to absorb the increase in the labor force. The manufacturing sector has played a remarkable role in the growth and development of any industrialized country. As a result, emerging economies build their growth strategies around manufacturing potential. The share and role of manufacturing in GDP is, therefore, a basic indicator of the significance of the sector in a country's economy.
The Government of India, through the Make in India initiative, aims at strengthening the manufacturing sector by creating the right business conditions to attract large scale investment in into the space.
This has given the manufacturing sector an impetus, and the investments made in infrastructure, healthcare, electronics are already proving to be fruitful. This will help India being seen as a global manufacturing hub for the world.
The lockdown intensified supply chain uncertainties, making organizations rethink and rework their sourcing strategies. Globally, one could see a fast-gaining preference in derricking organizational supply chains by focusing on developing a localized network, specifically in growing markets like India.
Initiatives taken by the Indian Government
In its effort to make India a manufacturing hub, the government has introduced industrial corridors that are designed to ensure efficient manufacturing. Heavy infrastructure investments to better communications and logistics have been critical in integrating India into the global supply chain.
Many innovative practices and research activities are being supported through fast-paced registration systems, and accordingly, the Intellectual Property Rights registration setup has been upgraded.
Many new initiatives have been launched in order to streamline and rationalize licensing rules at the state government level, aligning them with global best practices. The requirement of upgraded skills for industries is being identified, and accordingly, the development of the workforce is being undertaken by several state and national bodies.
Role of Lipi Data
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India has always been an attractive marketplace for foreign investments in the manufacturing sector. Many consumers electronic brands, automobile manufacturers, amongst others, have set up or are looking to establish their manufacturing base in the country. Trends suggest that the manufacturing sector of India is poised to reach US$ 1 trillion by 2025.
The Government of India aims to ensure the holistic development of the nation with an impetus on developing industrial corridors. These corridors would further assist in integrating, monitoring and developing a conducive environment for industrial development thereby making India a vital component of the global manufacturing supply chain.