The manufacturing sector in India is poised for substantial growth, with its contribution to the Gross Value Added (GVA) projected to increase significantly by 2032. According to a report by Sharekhan, the sector’s incremental contribution to the economy is expected to surpass 32 per cent, indicating its crucial role in India’s economic transformation. The surge in manufacturing is supported by robust capital expenditure by the government and corporations, driving the sector towards becoming a USD 10 trillion economy by 2034. Infrastructure investments in ports, railways, highways, and power have laid a strong foundation for manufacturing expansion, along with India’s large domestic market and strategic position in the global supply chain.
A key factor driving this transformation is the government’s Production-Linked Incentive (PLI) scheme, launched in 2020 to boost domestic manufacturing and decrease import dependency. With an outlay of over USD 24 billion, the PLI scheme covers 14 key sectors, including electronics, textiles, pharmaceuticals, automobiles, telecom, and renewable energy. By incentivizing manufacturers based on measurable outcomes like increased production and sales, the scheme has attracted significant investments from both domestic and international players, leading to the adoption of advanced technologies and economies of scale.
As of August 2024, the PLI scheme has attracted Rs 1.46 lakh crore in actual investments, resulting in production and sales worth Rs 12.50 lakh crore and the creation of around 9.5 lakh jobs, directly and indirectly. India is also leveraging its strong workforce and infrastructure development to position itself as a global manufacturing hub, aligning manufacturing with the broader vision of Atmanirbhar Bharat (self-reliant India). These efforts are expected to propel manufacturing to become a major contributor to incremental GVA, solidifying India’s standing in the global economy.
The report highlights that the manufacturing sector’s growth is supported by strong policy backing and strategic investments, setting the stage for a reshaping of India’s economic landscape. With the PLI scheme driving investments and advancements in technology, the sector is on a trajectory towards significant expansion. Overall, India’s focus on enhancing exports and promoting self-reliance in manufacturing is expected to yield long-term benefits and reinforce its position as a key player in the global economy.
In conclusion, the future looks promising for India’s manufacturing sector, with projections pointing towards substantial growth and a pivotal role in the country’s economic development. With continued support from the government, increased investments, and a focus on technological innovation, the sector is well-positioned to contribute significantly to India’s economic growth and global competitiveness. By leveraging its strengths and opportunities, India is set to emerge as a major player in the global manufacturing landscape, driving its journey towards becoming a USD 10 trillion economy by 2034.
