The sector’s gross value added (GVA) at current prices was estimated at US$ 348.53 billion as per the second advanced estimates of FY21. The manufacturing GVA accounts for 19% of the country's real gross value added. The India Manufacturing Purchasing Managers Index (PMI) reached 50.8 in May 2021 from 55.5 in April 2021.
As per the latest survey, capacity utilisation in India’s manufacturing sector stood at 66.6% in the third quarter of FY21.
The manufacturing component of IIP stood at 117.2 between April 2020 and March 2021.
According to the Ministry of Statistics & Programme Implementation, India’s industrial output that is measured by the Index of Industrial Production (IIP) stood at 126.6 in April 2021.
In April 2021, the industrial output indices for mining, manufacturing and electricity sectors stood at 108, 125.1 and 174, respectively.
The appliances and consumer electronics (ACE) market in India is expected to grow to US$ 21.18 billion by 2025 from US$ 10.93 billion in 2019. In April 2021, the Union Cabinet approved a PLI scheme for white goods (ACs and LEDs) worth Rs. 6,238 crore (US$ 840.89 million), boosting the manufacturing industry.
The Union Budget 2021-22 is expected to enhance India’s domestic growth in manufacturing, trade and other sectors. Development of a robust infrastructure, logistics and utility environment for the manufacturing sector is a primary focus field.
Some of these initiatives are as follows:
- The Mega Investment Textiles Parks (MITRA) scheme to build world-class infrastructure will enable global industry champions to be created, benefiting from economies of scale and agglomeration. Seven Textile Parks will be established over three years.
- The government proposed to make significant investments in the construction of modern fishing harbours and fish landing centres, covering five major fishing harbours in Kochi, Chennai, Visakhapatnam, Paradip, and Petuaghat, along with a multipurpose Seaweed Park in Tamil Nadu. These initiatives are expected to improve exports from the textiles and marine sectors.
- The 'Operation Green' scheme of the Ministry of the Food Processing Industry, which was limited to onions, potatoes and tomatoes, has been expanded to 22 perishable products to encourage exports from the agricultural sector. This will facilitate infrastructure projects for horticulture products.
- The Union Budget 2021-22 allocated funds of Rs. 1,000 crore (US$ 137.16 million) for the welfare of tea workers, especially women and their children. About 10.75 lakh tea workers will benefit from this, including 6.23 lakh women workers involved in the large tea estates of Assam and West Bengal.
- In May 2021, the government approved a PLI scheme worth Rs. 18,000 crore (US$ 2.47 billion) for production of advanced chemical cell (ACC) batteries; this is expected to attract investments worth Rs. 45,000 crore (US$ 6.18 billion) in the country, and further boost capacity in core component technology and make India a clean energy global hub.
Make in India 2.0 presently focuses on 27 sectors. The Government of India is continuously focusing on facilitating investment and establishing schemes to boost domestic investments in India. These include the following:
- In June 2021, Samsung completed construction of its display manufacturing unit in Noida in Uttar Pradesh—this in lieu of the company's plan to shift manufacturing capabilities from China.
- Production-linked incentive (PLI) was launched to establish global manufacturing champions across 13 sectors with an allocation of ~Rs. 1.97 lakh crore (US$ 27.02 billion) over the next five years (starting FY22).
- The scheme has created a buzz among global investors. On February 16, 2021, Amazon India announced to start manufacturing electronic products in India, starting first with Amazon Fire TV stick manufacturing. The company plans to start manufacturing with contract manufacturer Cloud Network Technology, a subsidiary of Foxconn in Chennai by end-2021.
- In April 2021, Bharti Enterprises Ltd. and Dixon Technologies (India) Ltd., formed a joint venture to take advantage of the government's PLI scheme for the manufacturing of telecom and networking products.
- In India, the market for grain-oriented electrical steel sheet manufacturing is witnessing high demand from power transformer producers, due to the rising demand for electric power and increasing adoption of renewable energy in the country.
- In line with this, in May 2021, JFE Steel Corporation in collaboration with JSW Steel Limited (JSW) signed a MoU to evaluate a study to establish a grain-oriented electrical steel sheet manufacturing & sales joint-venture company in India.
- To facilitate manufacturing and investment in sectors such as ICT and telecom, in May 2021, TEMA (Telecom Equipment Manufacturers Association of India) signed a collaboration deal with ICCC (Indo-Canada Chamber of Commerce) to promote ‘Make in India’ and ‘Self-reliant India’ initiatives.
- India's display panel market is estimated to grow from ~US$ 7 billion in 2021 to US$ 15 billion in 2025.
- In May 2021, as per IT Secretary of the Ministry of Electronics & Information Technology (MeitY), the government plans to introduce an incentive scheme for 3-4 large investments in the next six months to establish fabless display manufacturing units in India.
- The government approved a PLI scheme for 16 plants for key starting materials (KSMs)/drug intermediates and active pharmaceutical ingredients (APIs). The establishment of these 16 plants would result in a total investment of Rs. 348.70 crore (US$ 47.01 million) and generation of ~3,042 jobs. The commercial development of these plants is expected to begin by April 2023.
- As part of efforts to expand its smartphone assembly industry and improve its electronics supply chain, the government, in March 2021, announced funds worth US$ 1 billion in cash to each semiconductor company that establishes manufacturing units in the country.
Indian Manufacturing Sector in India Industry Report (July, 2021)
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