In a nutshell
Manufacturing has emerged as one of the high-growth sectors in India. The government’s ‘Make in India’ program intends to make India a manufacturing hub and create 100 million new jobs in the sector by 2022. India ranked second in the Global Manufacturing Risk Index 2021, becoming the second most sought-after manufacturing destination globally. The manufacturing sector of India has the potential to reach USD 1 trillion by 2025 and India can add more than USD 500 billion annually to the global economy through manufacturing by 2030.
The manufacturing sector in India employs more than 30 million people (organised and unorganised) and has the potential to push growth in the rural areas where more than 5 million manufacturing establishments are running already. The development of manufacturing facilities in rural areas can create an alternative source of livelihood apart from agriculture. The availability of a large skilled and semi-skilled labour force plays a major role in giving India an edge in manufacturing in different sectors.
According to the Department for Promotion of Industry and Internal Trade (DPIIT), cumulative FDI inflows in the manufacturing subsectors amounted to USD 100.35 billion between April 2000 and June 2021. Manufacturing also makes up a key component of India’s merchandise export.
Merchandise exports from select industries (including engineering, petroleum products, gems & jewellery, drugs & pharmaceuticals, and chemicals) stood at USD 374.05 billion between April 2021 and February 2022. Capital goods contribute 12% to the overall manufacturing in India and have a market size of USD 43.2 billion. Capital goods serve as a strong base for engagement across sectors such as Engineering, Construction, Infrastructure, Consumer goods, etc.
FDI in defence manufacturing
under the automatic route
FDI received by the sector in FY 2022
Budget allocation for electronics and IT hardware manufacturing
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Government working on PLI schemes for more products to boost manufacturing: Mr. Goyal
In order to increase manufacturing in India, the government is developing more production-linked incentive (PLI) schemes for a variety of goods, according to Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Mr. Piyush Goyal.
We are dedicated to turning India into a center of manufacturing. In addition to the PLI program for semiconductors, we have announced PLI schemes for 14 other industries, totaling between USD 33.83 -37.59 billion). In other fields, we are prepared to take on more responsibility. We are already working on a few PLI schemes should there be a need", Mr. Goyal said at a FICCI-organized business event.
The government has launched PLI schemes for 15 important industries, including technology, textiles, automobiles, pharmaceuticals, specialty steel, and electronics. The majority of these programs have received notification and are in various phases of implementation.
He emphasized that every Indian-made commodity must be of the highest quality and urged the manufacturers to abandon the idea that there are distinct standards for local and foreign markets.
