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India’s manufacturing sector has undergone notable changes in the past decade, driven by government initiatives and global shifts.
Current Manufacturing Landscape
GDP Contribution: In 2023-24, manufacturing accounts for 15.9% of India’s GDP, down slightly from 16.7% in 2013-14. Despite efforts like Make in India, the sector’s contribution remains largely unchanged.
Global Share: India ranks fifth globally, with 2.87% of the world’s manufacturing output, far behind China, which dominates with over 31%.
Trends Over the Last Decade
- Investment: The Production-Linked Incentive (PLI) scheme, introduced in 2020, has generated INR 1.4 lakh crore in investments and created 8.5 lakh jobs.
- Growth: While sectors like electronics and automotive have shown promise, overall growth at 4.7% in FY 2022-23 is below expectations.
Challenges and Future Outlook
Bottlenecks: High logistics costs, regulatory hurdles and skill gaps hinder progress, making India less competitive than countries like Vietnam.
Government Initiatives: With a goal to raise the manufacturing GDP share to 25% by 2030, reforms aim to reduce costs and improve efficiency.
In conclusion, while India has made strides in global manufacturing, overcoming key challenges is vital for sustained growth.
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