Last Updated: May 18, 2020
Last Updated: March, 2020
Manufacturing has emerged as one of the high growth sectors in India. Prime Minister of India, Mr Narendra Modi, had launched the ‘Make in India’ program to place India on the world map as a manufacturing hub and give global recognition to the Indian economy. India is expected to become the fifth largest manufacturing country in the world by the end of year 2020*. Government aims to achieve 25 per cent GDP share and 100 million new jobs in the sector by 2022.
The Gross Value Added (GVA) at basic current prices from the manufacturing sector in India grew at a CAGR of 4.29 per cent during FY12 and FY19 as per the annual national income published by the Government of India. The sector’s Gross Value Added (GVA) at basic prices based at current prices is estimated at US$ 403.47 billion in FY19PE. Quarterly GVA at Basic Prices for H1 2019-20 grew by 0.4 percent as compared to growth of 13.9 percent in H1 2018-19.
Under the Make in India initiative, the Government of India aims to increase the share of the manufacturing sector to the gross domestic product (GDP) to 25 per cent by 2022, from 16 per cent, and to create 100 million new jobs by 2022. Business conditions in the Indian manufacturing sector continue to remain positive. The manufacturing component of the IIP stood at 130.8 during April-January 2019-20 and grew 0.3 per cent year-on-year. India’s merchandise exports in April-January 2019-20 is estimated to be US$ 265.26 billion.
With the help of Make in India drive, India is on the path of becoming the hub for hi-tech manufacturing as global giants such as GE, Siemens, HTC, Toshiba, and Boeing have either set up or are in process of setting up manufacturing plants in India, attracted by India's market of more than a billion consumers and increasing purchasing power.
Cumulative Foreign Direct Investment (FDI) in India’s manufacturing sector reached US$ 89.15 billion during April 2000-December 2019.
India has become one of the most attractive destinations for investments in the manufacturing sector. Some of the major investments and developments in this sector in the recent past are:
The Government of India has taken several initiatives to promote a healthy environment for the growth of manufacturing sector in the country. Some of the notable initiatives and developments are:
India is an attractive hub for foreign investments in the manufacturing sector. Several mobile phone, luxury and automobile brands, among others, have set up or are looking to establish their manufacturing bases in the country.
The manufacturing sector of India has the potential to reach US$ 1 trillion by 2025 and India is expected to rank amongst the top three growth economies and manufacturing destination of the world by the year 2020. The implementation of the Goods and Services Tax (GST) will make India a common market with a GDP of US$ 2.5 trillion along with a population of 1.32 billion people, which will be a big draw for investors.
With impetus on developing industrial corridors and smart cities, the government aims to ensure holistic development of the nation. The corridors would further assist in integrating, monitoring and developing a conducive environment for the industrial development and will promote advance practices in manufacturing.
Note: Conversion rate used as on January 2020, Re 1 = US$ 0.01402
Notes: * - According to the Global Manufacturing Competitiveness Index published by Deloitte
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
Last Updated: May 18, 2020
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