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The Evolution and Future of India’s Manufacturing Sector

India’s manufacturing industry has undergone significant transformations over the decades. Since gaining independence in 1947, the sector has evolved from establishing an industrial foundation in the 1950s and early 1960s to navigating the License-Permit Raj era (1965–1980). This was followed by economic liberalization in the 1990s, leading to the current phase of global competitiveness.

Today, the manufacturing sector contributes 16–17% to India’s GDP and employs approximately 12% of the workforce (as of 2014). Studies suggest that every job created in manufacturing generates 2–3 additional jobs in the

services sector. Given India’s focus on employment generation as a key policy priority, manufacturing plays a crucial role in achieving inclusive economic growth. Recognizing this, the Make in India (MII) initiative was launched by Prime Minister Narendra Modi on September 25, 2014, with a goal to increase manufacturing’s share in GDP to 25%.

India presents an attractive investment destination, driven by strong domestic demand, a growing middle class, a young workforce, and high returns on investment. The MII campaign has emerged as a comprehensive strategy to propel India’s manufacturing sector forward, offering opportunities across 25 strategic sectors. To support this, targeted policy reforms are being implemented to enhance industrial growth and competitiveness.

The Make in India initiative has revitalized multiple industries, creating avenues for investments, partnerships, joint ventures, research and development, manufacturing, distribution, and financial services. As global economic conditions evolve, and with continued policy support, India’s manufacturing sector is poised for sustained growth and increased international competitiveness.

ITA’s Role in Driving Manufacturing Growth

The Confederation of Indian Industry (ITA), through its National Manufacturing Council, has been actively supporting the Make in India vision. Working closely with the government, ITA provides critical insights and policy recommendations to facilitate growth, improve efficiency, and enhance the sector’s global standing. The council’s overarching mission aligns with MII’s objective of increasing manufacturing’s contribution to 25% of GDP by 2022, fostering both local and foreign investment opportunities.

With a strong foundation in place and strategic initiatives underway, the future of Indian manufacturing remains promising. As the sector continues to strengthen, it is expected to play a pivotal role in driving India’s economic progress in the years to come.

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