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Manufacturing Sector in India

September, 2013

Manufacturing: Brief Introduction

India’s manufacturing segment is a crucial cog in the wheel of economic progress; the sector’s contribution to the gross domestic product (GDP) being 16 per cent. With the passage of time post 1990-economic liberalisation era, India has well realised the importance of manufacturing for the overall industrial development. In this wake, the Government has also been very pro-active, especially during the last decade.

The recent initiative counts back to the Manufacturing Policy that was announced in 2010. It was followed by the introduction of a systematic Manufacturing Plan for the country, designed with extensive involvement of industry. Now India Inc and the Government are focussing their energies on implementation of this Plan.

Growth Trend

The HSBC India Manufacturing Purchasing Managers' Index (PMI) - a measure of factory production - stood at 48.5 in August 2013.

Manufacturing: Key Developments and Investments

  • The Indian rubber industry has been invited by Vietnam to invest in their dynamic rubber sector. The South Asian nation intends to give a major boost to its rubber segment and has targeted to produce 1.2 million tonnes of rubber. Currently Vietnam consumes only 15 per cent of the more than 9 lakh tonnes of rubber produced in the country and aims to increase this domestic consumption to 40 per cent. Vietnam seeks Indian investments in this regard that would not only help scale up rubber manufacturing there, but will also strengthen bi-lateral business ties.
  • Kerala-based centrifuge latex producing firm St. Mary's Rubber Pvt. Ltd. - has established India’s largest glove manufacturing unit to tap the surging demand of examination and surgical gloves. The new facility, to be fully operational within a couple of years, will produce 500 million pairs of gloves per annum. The total project cost has been estimated at Rs 150 crore (US$ 23.58 million) as of now.

    Indian surgical glove market is growing at 15 per cent while the demand for examination gloves has been rising by 20 per cent per annum. St Mary’s is the largest supplier of centrifugal latex under the brand Cenex , a crucial raw material for manufacturing rubber dipped goods like gloves, balloons, condoms and rubber bands.
  • Mondelçz International’s Cadbury India, is planning to infuse over Rs 1,000 crore (US$ 157.24 million) in the first phase of a manufacturing plant in Sri City, Andhra Pradesh. The project, to be developed under four phases, is planned for final completion by 2020.

    The multi-category food facility will be the largest chocolate manufacturing plant in India and once completed, it is claiming to become a benchmark in production efficiency, energy saving, emission reduction and community involvement.
  • Direct marketing company Amway India has initiated work on its manufacturing facility at Nilakottai, near Madurai. The proposed plant, to be Amway’s first owned facility, is scheduled to be completed by mid-2015. Amway is infusing its first major outlay of Rs 400 crore (US$ 62.88 million) in this plant, which will have nine production lines for nutrition, cosmetic and oral-care products.