INDIA's - "Mission - Manufacturing"

History and Current Scenario :

1. Pre-Independence Manufacturing (Before 1947) - Before British colonization, India was known for its rich handicraft industry, with exports of textiles and other hand-made goods that dominated local and international markets. However, the colonial period shifted India’s economy to focus on raw material production, with limited industrial growth.

2. Early Industrialization Attempts (1830s-World War Periods) - India’s industrial journey began modestly in the early 1830s, with experiments in iron-making in Tamil Nadu. The first significant Indian enterprise, Tata Group, was established in 1868 by Jamsetji Tata. However, growth was stunted by restrictive colonial policies.

During the world wars, Indian industries grew as the country supported British war efforts. Yet, the lack of substantial infrastructure and restrictive trade practices limited industrial expansion.

3. Post-Independence Era (1948-1991) - Following independence in 1947, India adopted centralized economic planning, focusing on basic and heavy industries to establish self-sufficiency. The first five-year plans prioritized public sector undertakings in iron, steel, and heavy machinery, laying the foundation for the country's industrial capabilities.

However, restrictive policies under the “license raj” and overreliance on public sector enterprises limited efficiency and growth, with the manufacturing sector struggling to maintain competitiveness.

4. Economic Liberalization and the Impact of 1991 Reforms - The economic reforms of 1991 marked a turning point for Indian manufacturing. With the removal of the license raj, India opened its economy to foreign investment and private sector growth, reducing trade restrictions and enabling local industries to compete globally.

As a result, Indian manufacturing expanded, though it remained largely service-driven until recent years. Growth remained volatile but steadily increased, laying the groundwork for the more recent “Make in India” initiative.

5. The Current Scenario: India’s Manufacturing Landscape in 2024

Today, the manufacturing sector contributes about 17% of India’s GDP and is one of the fastest-growing areas in the Indian economy. The sector’s transformation has been catalyzed by the Make in India initiative, launched in 2014, which seeks to make India a global manufacturing hub by boosting production capacity, technological innovation, and export potential across industries.

a. Technological Advancements - Digital transformation is becoming central to Indian manufacturing, with automation, artificial intelligence, and data-driven production processes enhancing productivity. This shift is enabling India to compete more effectively with global manufacturing leaders.

b. Production Growth and Export Potential - India’s manufacturing sector is anticipated to reach $1 trillion by 2025-26. The sector hit a significant milestone in March 2024, reaching a 16-year high in the HSBC Manufacturing Purchasing Managers' Index (PMI) at 59.1, indicating strong output, new orders, and job creation. This progress reflects India’s increasing capacity to produce and export goods at a global scale.

c. Sectoral Growth and Investment - The government’s Production Linked Incentive (PLI) schemes and policies aimed at attracting foreign investment have boosted growth across sectors. The PLI scheme has targeted areas like electronics, automotive, and chemicals, driving foreign direct investment (FDI) inflows in manufacturing to $165 billion, a 69% increase over the past decade.

d. Projected Global Impact - India’s goal is to reach $1 trillion in exports by 2030. Sectors like e-commerce are projected to grow significantly, with annual exports potentially reaching $400 billion by 2030. Additionally, the government’s support for export-driven manufacturing is positioning India as a potential leader in several industries, including electronics, automotive, and pharmaceuticals.

India’s manufacturing landscape today is marked by high growth potential, targeted policy support, and a diverse industrial base. These factors collectively aim to elevate India as a formidable global manufacturing hub in the years to come.

References - ibef.org