Manufacturing sector is one of the highest growing sectors in Indian economy. India accounts for around 1.8 percent of global manufacturing output. Prime Minister of India, Mr Narendra Modi had launched an exclusive program called as ‘Make In India’ to provide a global recognition for the development of manufacturing sector. It’s an initiative to welcome investments into the sector in order to ease procedures and bring exponential growth. In recent times, the improved efficiency of the companies has influenced profits in the sector which is a positive sign for its growth in India’s future.
Factors influencing the growth of manufacturing sector in India:
- Foreign Direct Investment
This investor-friendly policy has opened the floodgates for a large number of investments in the country which has boosted the production. 49 percent FDI is allowed in the defence industry whereas 100 percent is allowed in the private sector. Services, chemicals, power industry, textiles industry, computer software & hardware, automobile industry, drugs & pharmaceutical industry, etc. are the industries which have grabbed FDI in higher proportion.
- Government Schemes
Indian government has launched several schemes in order to boost the economy and bring it at a global level. ‘Skill India’ is one of those schemes where the government focuses on a multi-skill development programme with an objective for availing employments as well as entrepreneurship for all socio-economic classes. It’s a mission to enhance employments for the youth on the basis of skill development and providing workforce mobility. While ‘Make In India’ and ‘Skill India’ are burgeoning the economy, other schemes like ‘Digital India’ are also boosting up opportunities in the manufacturing sector.
The urban population is growing and developing economically. Around 35 cities in India are having million plus population. With such impeccable manpower, the industrial sector is rising rapidly and it has influenced the development of infrastructure as well. Conventional infrastructure to regulate transport and logistics and proper supply of power & electricity have improved the corporate sector performance.
India’s automobile industry is positioning well, both demographically and economically. It’s not only fulfilling the domestic demand but also, it’s bringing export opportunities for the sector. The market of private vehicles is rising as the country’s working-age population seek its supply. While two-wheelers comprise most of the automobile output in India, four wheelers are also expected to gain volumes.
Due to increased investments in industries and infrastructure, Indian engineering sector has experienced a remarkable growth in recent times. Engineering sector is inter-connected with the manufacturing sector and its strategic importance to India’s economy is significant. With technical excellence and innovation, the engineering sector is rapidly burgeoning in India. The growth is mainly driven by sub-sectors like oil & gas, infrastructure, power & energy, steel, consumer durables, automotives, etc.
The manpower cost in India is relatively low and domestic market has developed strong consumerism. Education is growing rapidly inculcating strong technical and engineering potential amongst the youth. On the threshold of major reforms in manufacturing sector, India can reach the milestone of becoming the third largest economy of the world by 2030.