Tech mahindra
Tech mahindra

The #MakeinIndia Opportunity for Manufacturing

Posted by: Karthikeyan Natarajan On November 17, 2014 10:56 AM facebook linked in twitter

Emerging markets are redrawing the map of global trade with several countries in Asia jumping up the global rankings in terms of exports in high-tech products, according to reports. Manufacturing plays a key role in this. Much of developing Asia’s ascendance is driven by China’s near six-fold increase in exports of high-tech goods to 36.5% in 2013 from a mere 6.5% in 2000. This says a lot about the breadth and depth of China’s manufacturing capabilities, especially in Hi-tech. However, the phenomenal growth that China witnessed is expected to taper off because of slowing economic growth, rising wages and supply chains becoming more complex.

Some of these dynamics point to other countries developing competencies and the ecosystem to attract hi-tech manufacturing. India is one of the countries that can achieve great scale in hi-tech manufacturing. Despite multiple challenges in power and transportation infrastructure, lack of structured industrial policies, and complex regulatory and legal environments, hi-tech exports from India have been witnessing a CAGR of 26% during the period 2007-2011, with exports touching $21 billion compared to $8 billion in 2007. In the last two decades, the Indian economy has witnessed a transformational change from being a low-cost production hub to engineering and building value-added products. Further, the importance of hi-tech manufacturing sector is set to increase as a combination of supply-side advantages, policy initiatives, and Government and private sector efforts are poised to set India on the path to becoming a global manufacturing hub.

The country’s recent ‘Make in India’ campaign shows a clear focus on why the country needs to become a global powerhouse. The campaign is aimed at meeting the challenging issues that hinder economic growth, sustainably and over the long term. According to reports, the initiative will trigger Foreign Direct Investment (FDI), cut red tape, and simplify labour regulations to make manufacturing in India easier and more appealing. The initiative is intended to increase manufacturing sector growth to 12-14% per annum over the medium term and increase the share of manufacturing in the country's Gross Domestic Product from 16% to 25% by 2022. Importantly, the campaign is estimated to create 100 million additional jobs by 2022 in the manufacturing sector alone.

Another aspect that technology companies should embrace is the Smart City program. The country has long been saddled with the paradox of providing world class engineering and technology services to the rest of the world while India has languished in utilizing technology for the greater good. An initiative such as the Smart City provides an excellent chance for Indian technology companies to innovate for India. A well planned and executed Smart City opens up several avenues for streamlining governance, improving public services, creating opportunities and growing sustainably. The Make in India campaign has rightly chosen to focus on smart cities and industrial corridors to showcase the strength of the engineering and technology capabilities and innovation available with us.

While the Make in India campaign is still in its early days, it has put the spotlight on several areas pertinent to long term sustainable growth. We will have to wait and watch if the campaign will make India a global manufacturing destination. I invite to share your thoughts on this.

Tags: Connected Industries
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It is well written blog. India has all the necessary ingredients including technology and manpower. Make in India campaign will be successful if the execution is done well producing superior quality.

Posted by:Rao | 4/29/2015 3:15:22 PM

good food for thought, only difference is its lunching in an asian sunday buffet restaurant.

Posted by:Sanjay | 4/30/2015 1:44:32 AM

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