India is sitting on the verge of a great economic opportunity. The pandemic has had an enormous effect on global production, fundamentally altering logistic costs and sourcing networks. However, manufacturing has been a high-development area in India.
COVID had stirred up the whole world, and India too was not spared of its adversary effects. Despite being the fastest-growing economy in the world, it has failed to attract multi-billion dollar investments from big MNCs.* However, Foreign Direct Investment (FDI) in manufacturing has risen, exhibiting India’s potential to become a global manufacturing hub!
India’s position in the manufacturing arena yet
Raghuram Rajan, the governor of the Former Reserve Bank of India (RBI), has expressed his opinions on how India should focus on expanding its service sectors rather than replicating China’s model of manufacturing. The strategy has not worked out for India for a long period.
Manufacturing is crucial to the government’s agenda as it aims to achieve a double-digit growth rate of GDP. The government has provided the country with an ocean of opportunities through numerous initiatives like “Make in India”, encouraging foreign companies to invest in India’s manufacturing growth. In the past, many multinational companies like Hutchinson, Lafarge, Docomo, Henkel, etc. have exited the country because of an unfriendly business environment.**
The last 5 years have particularly seen a decline in the investment of reputed automakers from India. One of the reasons might be corporate strategy shifts. A weak Capex cycle has also pushed many foreign investors to retrench their plan of expansion.
Is there a scope for improvement?
India is one of the largest developing economies in the world. It can export goods worth 1 trillion dollars by 2030, achieving which it could become a major global manufacturing hub. Through implementing varied strategies and programs, the government is anticipating having 25% economic output in manufacturing, in the next 5 years.
There are however some strategies that India needs to improve to make a solid footing in the manufacturing world. China has been the de-facto factory of the world; from industrial raw materials to chemicals, they are all sourced from China. But the pandemic made businesses realize that dependency on one manufacturing hub is unsustainable.
The following strategic issues, if worked on, can result beneficial to the country.
- India needs to focus on strengthening trade with the UK, USA, Europe, etc. A greater focus on bilateral deals would help bring increased trade activity. India’s economy and private sector today are strong enough to give competition to global MNCs. We must therefore not play defensive anymore and lower trade barriers and impart special treatment for Indian merchandise, which can lead to demand floodgates.
- India needs to renew its focus on promoting industrial groups for more manufacturing brands need to come on board. Advertisers need land, work, and financial support to execute activities at an incredible speed. Several industrial corridors along the Delhi-Mumbai, Chennai-Bangalore, and Vizag-Chennai were planned but were not executed. More export incentive forces should be provided to lessen the alternate expenses in the import of unrefined substances.
- India needs to focus on strengthening trade with the UK, USA, Europe, etc. A greater focus on bilateral deals would help bring increased trade activity. India’s economy and private sector today are strong enough to give competition to global MNCs. We must therefore not play defensive anymore and lower trade barriers and impart special treatment for Indian merchandise, which can lead to demand floodgates.
- India needs to renew its focus on promoting industrial groups for more manufacturing brands need to come on board. Advertisers need land, work, and financial support to execute activities at an incredible speed. Several industrial corridors along the Delhi-Mumbai, Chennai-Bangalore, and Vizag-Chennai were planned but were not executed. More export incentive forces should be provided to lessen the alternate expenses in the import of unrefined substances.
- To meet global standards, a strong impetus is required in Indian manufacturing. Loss of employment due to the mechanism will easily be resolved with the growing need for industries in packaging, design, quality control, and logistics. Re-skilling support for workers in industrial areas should be supported through various programs.
- The cost of capital has to come down considerably to allow exports to be competitive globally.
- Export growth would not survive without adequate ports and shipping infrastructure. India needs to have its shipping lines and support from the private sector to meet extensive capital requirements.
Factors that might help India’s manufacturing disposition
- China’s decline in competition
India is now in a good position to benefit from China’s degraded product quality, resulting in its decline in competitiveness. Moreover, India is revising its trade policy to take advantage of the China-plus-one strategy. This is the strategy in which companies avoid investing in China solely, and distribute their businesses over other destinations.
2. Dependence on service sectors
The pandemic also made us realize the flaw of too much dependency on the service sector. This led to the government putting in more effort to promote the manufacturing industry. Moreover, manufacturing activities leads to the creation of large employment in different sectors too.
3. Digital transformation
The whole world faced a digital shift after the pandemic hit us. It became an element in gaining an advantage in the competitive industry. The Indian manufacturing industry is [1]steadily moving towards more digitalized manufacturing, which is to enhance efficiency and productivity.
[1] * Sourced from forbesindia.com
**sourced from forbesindia.com
4. Government initiatives
The ‘Make in India’ initiative is one of the noteworthy programs under which new business ventures in the manufacturing industry could benefit in numerous ways. It is clear why India’s manufacturing sector grew by more than 210% in the Financial Year of 2022.
To Conclude
India has tremendous potential to become the biggest global manufacturer. After all, China achieved great heights, and so did many other South-Asian countries. Many industries are looking for new sources of supply and India could be the next big source. However, plenty of strategies need to be incorporated to make the country’s infrastructure equipped. With the right time and place, brands would find the correct amount of success in the country!
Know More...https://fixigo.in/
Enquiry Page… https://fixigo.in/enquiry
Check Our Media Coverage...https://lnkd.in/etXvUAda
https://www.mobilityoutlook.com/news/fixigo-plans-expansion-into-south-west-india/?
Download Our App: – https://fixigo.in/Application.html
Press Release…..