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From Smartphones to Semiconductors: India’s Strate- gic Manufacturing Ambitions

From Smartphones to Semiconductors: India’s Strate- gic Manufacturing Ambitions

India’s manufacturing sector has become a cornerstone of the nation’s economic growth, showcasing remarkable performance across key industries such as automotive, engineering, chemicals, pharmaceuticals, and consumer durables. According to the India Brand Equity Foundation (IBEF) the pre-pandemic, the manufacturing industry contributed 16-17% to India’s GDP and is poised to be one of the fastest-growing sectors in the coming years.

The machine tool industry can be said to be the mother machine industry as the backbone of the manufacturing sector; machines relevant to product and technology are part of the machine industry. Be it automotive or energy, textile machinery, printing or similar, while machines for each of these industries are specialised in product engineering.

Digital transformation has become a critical component, driving innovation and providing a competitive edge in the market. This shift towards more automated and process-driven manufacturing is set to enhance efficiency and boost productivity, positioning India as a significant player in global supply chains.

Prime Minister Narendra Modi, in his recent address, emphasized the achievements and future goals of the NDA government. “We made India the second-largest smartphone manufacturer. Now, we will increase work in semiconductors and electronics production sectors,” he stated, highlighting the growth in the electronics and semiconductor industries. This ambition is underpinned by the country’s solid physical and digital infrastructure, enabling the manufacturing sector to expand its share of the economy and compete globally.

The Indian government aims for the manufacturing sector to account for 25% of the GDP by 2025, up from the current 17%. This goal is supported by the National Manufacturing Policy and the Production-Linked Incentive (PLI) scheme, which was launched in 2022. These initiatives are designed to elevate the core manufacturing sector to global standards, facilitating Industry 4.0’s integration into the Indian economy.

With a workforce of over 27.3 million, the manufacturing sector is a significant employment generator. The sector’s growth is bolstered by various government programs, which aim to create long-term employment opportunities and skill development pathways for millions of people. India’s potential in international markets is driven by its rich resources, industrial expertise, and entrepreneurial spirit.

Several market opportunities lie ahead for India’s manufacturing sector, including expanding exports, localizing imports, catering to internal demand, and engaging in contract manufacturing. The country is on track to export goods worth US$ 1 trillion by 2030, further solidifying its role as a global manufacturing hub.

The government plans to offer incentives worth up to Rs. 18,000 crore (US$ 2.2 billion) to boost local manufacturing in six new sectors, including chemicals, shipping containers, and vaccine inputs. This strategy aims to diversify and strengthen the manufacturing base, ensuring resilience and competitiveness.

The mobile phone manufacturing industry, propelled by government incentives and rising global demand, is expected to create 150,000 to 250,000 jobs in the next 12-16 months. Major players like Apple and its contract manufacturers, along with Dixon Technologies, are scaling up their operations to meet this demand.

Prime Minister Modi also underscored the government’s commitment to defence production and exports, emphasizing the goal of achieving self-reliance in the defence sector. “We have tried to increase defence production and exports. We will not stop till the time the defence sector becomes atmanirbhar (self-reliant),” he asserted.

Additionally, the focus on green industrialization is set to transform India’s manufacturing landscape. “Be it green energy or green mobility, we will take India to the forefront,” PM Modi affirmed, indicating a strong push towards sustainable and eco-friendly industrial practices.

India’s initiative in the manufacturing sector is expected to witness unprecedented growth. With a strategic focus on digital transformation, innovation, and global competitiveness, India is well on its way to becoming a leading global manufacturing hub, driving economic growth and job creation for years to come.