Make in India 2.0: Catalyst for Manufacturing Growth

The enormous growth of India’s manufacturing industry

March 14, 2024
  • Saravanan Srinivasan
  • Chandranath Dey
  • Vipul Chaudhary

With India’s strong domestic demand and promising export prospects, it is quickly emerging as a top choice for global manufacturers. The country’s per capita GDP is steadily growing, which fuels the demand and acts as a catalyst for economic growth. The government’s initiatives to promote the manufacturing sector through favourable policy reforms, such as incentivizing domestic manufacturing, implementing labour reforms, and simplifying business regulations, have resulted in a significant increase in investment flow.

The Production-Linked Incentive (PLI) scheme has played a crucial role in accelerating project commencement and generating employment opportunities, leading to income growth. Manufacturers are also showing a positive sentiment towards capital expenditure, indicating their confidence in the sector. The remarkable transformation in India’s automobile industry, particularly the shift towards electric vehicles (EVs), has been attracting more global investments. In addition to established players, Indian startups are also- successfully attracting investments in this sector, showcasing the country’s potential for innovation and growth.

Renewable energy and Electronics sectors are also playing a significant role in the growth of India’s manufacturing sector. With a focus on sustainable industries, India is witnessing a surge in renewable energy projects, including solar and wind power. The electronics sector is another key contributor, with the country’s growing middle class driving demand for consumer electronics and appliances. Furthermore, in a post-COVID world, India’s Healthcare and Pharmaceutical sector has experienced remarkable growth. The country has established its credentials in generic drug manufacturing, and with its strong capabilities in research and development, it has become a hub to produce essential medicines. Additionally, the medical devices manufacturing industry has emerged as another successful sector, further bolstering India’s position as a destination for healthcare manufacturing. This trend is aligned with the government’s goal of achieving a one-trillion-dollar manufacturing sector by 2025.

State governments are actively promoting infrastructure development and introducing favorable industrial policies to attract more investments in the sector. The consistent growth of the Purchase Managers Index further reinforces the increase in production, driven by strong demand. Overall, India’s manufacturing sector is thriving, supported by robust domestic demand, favorable government policies, investment inflow, and a shifting focus towards sustainable industries. The sector’s growth momentum is expected to continue in the coming years, making India an attractive destination for global manufacturers.

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