The geopolitical reasons around the world and government impetus within the country has created a uniquely suited environment for the growth of the manufacturing sector in India. India is one of the most sought-after manufacturing hubs across the globe and according to projections export goods and commodities will be worth US $ 1 trillion by 2030. Not only is there a robust demand for different manufacturing industries but the Foreign Direct Investment (FDI) into Indian markets is extremely promising with more companies looking to invest. The bustling manufacturing sector, although heading towards automation, is still the driving force behind a major chunk of the labour force of India and will continue to be for the foreseeable future.
The future of the Indian manufacturing sector is bright and more importantly packed with innovation and potential to scale.
Opportunities:
Over the next 10 years, manufacturing companies in India can really scale from being Small and Medium Enterprises (SMEs) to medium and large companies and the best way to do this is by investing in core manufacturing infrastructure. Whether in terms of equipment or technological innovation, investment in the sector is a great way to boost production and ensure profits not just for the individual companies but also profits that add to the national gross domestic product (GDP).
The future is ripe with possibilities especially with the entire ecosystem for components & core raw material getting developed in India. It has taken India the last 2 decades to build the foundation required for scaling its manufacturing to larger and complex products. Now that the opportunity has presented itself, we as a country should come together and make the most of it.
Further, India being strong in software & information technologies, we can use machine learning, artificial intelligence and other forms of reality technologies to further increase production and process efficiencies to make ourselves competitive.
Today India can match and even better the products that are being manufactured in China, both in terms of cost and quality, which is bound to bring in tremendous business to India.
There is also a lot of space to grow and improve, in areas of core manufacturing process, material understanding, designing, employment training, machine manufacturing, data tracking and even in automation. All of these opportunities are waiting to be explored, all of which have the potential to make the Indian manufacturing sector a global hub for all kinds of manufacturing.
Challenges:
Growing too slow could render India non competitive, as the growth rate of manufacturing infra has to match pace with the demand growth, considering local and international markets. Countries and companies are constantly looking to one up each other and all it takes is a slightest snag in the system to hold the company and the country back.
A major hindrance in this growth is the lack of disciplined & consistent workforce at the factory level which wants to work consistently towards improvement of their own professional life and that of the company & country. The workforce needs to mature and needs to develop long-term goals for self-development and growth. Here the government, society and education system could play a major role.
Another challenge that India needs to overcome is the need for adequate infrastructure of roads, ports, electricity & similar services. For example, data suggests that India uses about 3 percent of its GDP for infrastructure construction each year, as compared to China’s 20% of its GDP. Infrastructure is the foundation of any sector and especially the manufacturing where big set-ups are crucial to make the products required.
In addition to this, entrepreneurs need to understand and commit to building sustainable manufacturing companies as manufacturing cannot be a part-time activity for companies that want to really grow in this sector. Complete discipline and clear strategy are also critical to survive and thrive.
If we don’t keep pace or live up to the expectation that the world is placing on India over the next 5-10 years, we could lose a golden opportunity. So manufacturing companies, financial institutions, governments, investors, customers and consumers should all come together to grab this opportunity with both hands and to lead the country into a fundamentally stronger tomorrow, an Atmanirbhar Bharat.