India’s Manufacturing Sector is poised for significant growth, with its contribution to the Gross Value Added (GVA) expected to rise from the current 14% ($459 billion) to 21% ($1,557 billion) by 2032.
According to a report by Sharekhan, the manufacturing sector’s incremental contribution to the economy is projected to exceed 32%, highlighting its critical role in driving India’s economic transformation.
The report said, “Manufacturing set to get a higher slice of GVA.” The surge in manufacturing is backed by robust capital expenditure (capex) by both the government and corporations.
The sector’s incremental contribution to the economy is expected to exceed 32%, underscoring its pivotal role in driving India’s march toward becoming a $10 trillion economy by 2034.
The report emphasized the robust measures fuelling this growth, including increased capital expenditure (capex) by the government and corporations. Infrastructure spending on ports, railways, highways, and power has provided a strong foundation for manufacturing expansion.
Additionally, India’s large domestic market, driven by strong consumption patterns, and its strategic positioning in the global supply chain diversification, further bolster its manufacturing prospects.
India’s Manufacturing Sector: More Details!
A key driver of this transformation as per the report is the government’s Production-Linked Incentive (PLI) scheme. Launched in 2020, the scheme is a strategic initiative aimed at boosting domestic manufacturing and reducing import dependency.
As per government data, with an outlay of Rs 1.97 lakh crore (over USD 24 billion), the scheme spans 14 critical sectors, including electronics, textiles, pharmaceuticals, automobiles, telecom, and renewable energy.
The PLI scheme incentivizes manufacturers based on measurable outcomes, such as increased production and incremental sales. This performance-driven approach has attracted significant investments from domestic and international players, encouraging the adoption of cutting-edge technologies and economies of scale.
The government data also highlighted that as of August 2024, the scheme has achieved substantial success, with Rs 1.46 lakh crore in actual investments. These investments have spurred production and sales worth Rs 12.50 lakh crore and created approximately 9.5 lakh jobs, directly and indirectly.
India is also leveraging its strong workforce and infrastructure development to establish itself as a global manufacturing hub. The country’s efforts to enhance exports and align manufacturing with the broader vision of Atmanirbhar Bharat (self-reliant India) are expected to yield long-term benefits.
Furthermore, the report predicts that these trends will propel manufacturing to become a significant contributor to incremental GVA, cementing India’s position in the global economy. With strong policy support and strategic investments, the manufacturing sector is on track to reshape the country’s economic future.
(ANI Copy)
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