- According to a FICCI-McKinsey report, by 2047, a growing India is expected to become a high-income nation with six times its current per capita income and to create 60 crore jobs to gainfully employ its growing workforce.
- Achieving this potential will make India an approximately Rs 1500 lakh crore ($19 trillion) economy in real terms by 2047, with the economy growing at a real GDP growth rate of 7.7%.
- Industry will be the key lever to propel the economy towards this goal. Overall, manufacturing has the highest potential of all sectors to propel job growth, with the potential to create 60 million to 70 million jobs by 2030.
New-age Factory of the World
- With the Covid-19 pandemic highlighting the challenges of concentrated supply chains, companies worldwide are looking for alternatives to their primary suppliers that will ensure greater resilience.
- India could capitalise on this emerging opportunity and capture an increased share of key global supply chains valued at between $800 billion and $1.2 trillion by 2030. India is well positioned to leverage Global Value Chains (GVC) for higher economic growth and job creation.
- In labour-intensive sectors like textiles and apparel, India is well integrated into global value chains, though there is scope for greater expansion. In some of the capital-intensive sectors too, like electronics, India has good GVC linkages.
- The aim should be to further increase India’s presence in five to six specific global value chains (e.g., chemicals, medical devices) by developing port-proximate clusters like the Mumbai—Thane—Raigad cluster for electronics and chemicals.
- State governments could support efforts by creating plug-and-play cluster zones based on their manufacturing strengths. For example, multi-modal logistics parks are being set up in several cities under the government’s road-development programme, ‘Bharatmala’, and these could become world-class, efficient logistics zones for manufacturing (for example, electronics and aeronautics in Nagpur).
- Additionally, adopting contract manufacturing to raise capacity utilisation to over 80%, and facilitating single-window clearance could raise India’s presence in these specific global value chains.
Embracing the Digital Revolution in Manufacturing
- Manufacturing enterprises, both large and small and medium-sized, can develop a new paradigm of production by leveraging 4.0 technologies (IoT, AI, big data analytics, and robotics) to digitalise some or all levels of business operations.
- Digitisation could improve reliability and value chain resilience. For example, by leveraging advanced analytics such as telemetry, manufacturers could optimise their delivery networks and better forecast demand at the stock keeping and distributor levels.
- Technology grants and international joint ventures could help secure technology expertise that would help propel manufacturing into the digital future.
- Besides that, a workforce with the right skills and capabilities would also be essential to bringing technological advancements to the manufacturing sector.
- Support for skilling and upskilling initiatives will be the need of the hour for manufacturing MSMEs to advance in the future.
- Additionally, the government must incentivise technological investments, boost R&D, and expand institutional capacity.
Leaping towards Sustainable Manufacturing Future
- Manufacturing has a significant impact on environmental issues because it is a major source of GHG and other pollutants. The future of manufacturing is sustainability.
- Through a number of initiatives, the Indian Government is enticing businesses to adopt sustainable manufacturing, including ‘Zero Defect Zero Effect’, ‘Digital India’, and many others.
- To complement these initiatives, manufacturers across the value chain need to prioritise the creation of green alternatives, such as bio-based feedstock and sustainable packaging, green building materials, aligning industry standards for green labels, and setting up recycling hubs.
- India has made substantial improvements in its policy and regulatory environment, making it much easier for enterprises to establish themselves and flourish.
- The process of reforms should further gather pace and strengthen the foundation on which India will have a world-class industrial sector that is efficient, productive, sustainable, and will imbibe a major export orientation.