{"id":34579,"date":"2024-12-31T18:28:28","date_gmt":"2024-12-31T12:58:28","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=34579"},"modified":"2025-02-17T14:51:46","modified_gmt":"2025-02-17T09:21:46","slug":"india-global-manufacturing-hub-growth","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/31-12-2024\/india-global-manufacturing-hub-growth","title":{"rendered":"India Emerges as Global Manufacturing Hub with Remarkable Growth"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.nextias.com\/ca\/editorial-analysis\/07-12-2024\/india-manufacturing-sector\" data-type=\"link\" data-id=\"https:\/\/www.nextias.com\/ca\/editorial-analysis\/07-12-2024\/india-manufacturing-sector\"><strong>India\u2019s manufacturing sector<\/strong><\/a> has witnessed remarkable growth this year, underscoring its transformation into a global powerhouse.\u00a0<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>About<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Toy exports grew by <strong>239%<\/strong>, and mobile phone production by<strong> 600%.&nbsp;<\/strong><\/li>\n\n\n\n<li>By 2024, India ranked among the top four nations with the largest foreign exchange reserves, exceeding $700 billion.<\/li>\n\n\n\n<li><strong>In the Global Innovation Index 2024,<\/strong> the country climbed to 39th place up from the 81st in 2015.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>India\u2019s Manufacturing Sector<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Manufacturing exports<\/strong> have registered their highest ever annual exports of US$ 447.46 billion with 6.03% growth during FY23.&nbsp;<\/li>\n\n\n\n<li><strong>By 2030,<\/strong> the Indian middle class is expected to have the second-largest share in global consumption at 17%.<\/li>\n\n\n\n<li><strong>India\u2019s gross value added (GVA)<\/strong> at current prices was estimated at US$ 770.08 billion as per the quarterly estimates of the first quarter of FY24.<\/li>\n\n\n\n<li><strong>India&#8217;s e-commerce exports<\/strong> are projected to grow from US$ 1 billion to US$ 400 billion annually by 2030, aiding in achieving US$ 2 trillion in total exports.<\/li>\n\n\n\n<li><strong>India&#8217;s smartphone exports <\/strong>surged by 42% in FY24, reaching US$ 15.6 billion, with the US as the top destination.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Challenges faced by India&#8217;s manufacturing sector<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Technological gap:<\/strong> Indian manufacturing lags in the adoption of Industry 4.0 technologies such as automation, IoT, and AI, reducing global competitiveness.<\/li>\n\n\n\n<li><strong>Skill Gap:<\/strong> There is a significant gap between the skills of the available workforce in India and the needs of modern manufacturing.<\/li>\n\n\n\n<li><strong>Supply Chain Disruptions:<\/strong> High dependency on imported raw materials and components, especially from China, exposes the sector to global supply chain disruptions.<\/li>\n\n\n\n<li><strong>Governance Issues:<\/strong> Frequent changes in industrial policies along with delays in their implementation create uncertainty for investors.<\/li>\n\n\n\n<li><strong>Global Competition:<\/strong> India faces stiff competition from countries like China, where manufacturing costs are lower due to economies of scale and more efficient infrastructure.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Initiatives taken by Government<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Goods and Services Tax (GST): <\/strong>The introduction of GST streamlined indirect taxation and automated tax compliances, easing the burden for businesses.<\/li>\n\n\n\n<li><strong>Reductions in corporate taxes<\/strong> along with simplified construction permits and the abolition of archaic laws were implemented to improve the ease of doing business.<\/li>\n\n\n\n<li><strong>FDI policy: <\/strong>Nearly all sectors allow for <strong>100% FDI<\/strong>, except for certain prohibited sectors.\n<ul class=\"wp-block-list\">\n<li>For example the defence industry allows <strong>74% FDI<\/strong> under the automatic route and <strong>100% <\/strong>under the government route.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Initiatives like Make in India and Digital India,<\/strong> improved infrastructure and ease of doing business, supported by various incentives, have stimulated domestic manufacturing and attracted foreign investments.<\/li>\n\n\n\n<li><strong>Make in India Mittelstand (MIIM)<\/strong> , a collaboration between India and Germany, focuses on driving innovation and enhancing economic cooperation by encouraging small and medium-sized German companies to invest and manufacture in India.<\/li>\n\n\n\n<li><strong>Japan-India Make-in-India Special Finance Facility: <\/strong>The fund aims to promote direct investment of Japanese companies and trade from Japan to India, including the development of necessary infrastructure.<\/li>\n\n\n\n<li><strong>Production Linked Incentive (PLI) Scheme: <\/strong>The PLI scheme has prompted major smartphone companies like Foxconn, Wistron and Pegatron to shift suppliers to India, resulting in the manufacture of top-end phones in the country.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Way Ahead<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>India approved the <strong>construction of three semiconductor plants<\/strong> with investments exceeding <strong>$15 billion.<\/strong>\n<ul class=\"wp-block-list\">\n<li>This initiative aligns with India&#8217;s goal to bolster its semiconductor ecosystem and create numerous advanced technology jobs.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>The Mega Investment Textiles Parks (MITRA) scheme<\/strong> to build world-class infrastructure will enable global industry champions to be created, benefiting from economies of scale and agglomeration.&nbsp;<\/li>\n\n\n\n<li>The Ministry of Heavy Industries &amp; Public Enterprises initiative of&nbsp; <strong>SAMARTH Udyog Bharat 4.0, or SAMARTH Advanced Manufacturing and Rapid Transformation Hubs, <\/strong>&nbsp;is expected to increase competitiveness of the manufacturing sector in the capital goods market.<\/li>\n<\/ul>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/www.newsonair.gov.in\/india-emerges-as-global-manufacturing-hub-with-remarkable-growth\/\" target=\"_blank\" rel=\"noopener\"><strong>AIR<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>India\u2019s manufacturing sector has witnessed remarkable growth this year, underscoring its transformation into a global powerhouse.\u00a0<\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-34579","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/34579","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=34579"}],"version-history":[{"count":2,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/34579\/revisions"}],"predecessor-version":[{"id":37454,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/34579\/revisions\/37454"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=34579"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=34579"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=34579"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}