Increasing demand for Indian goods in both domestic and overseas markets, coupled with availability of cheap and skilled workforceis driving the growth of the Indian manufacturing industry .jpg) Ever since the Government of India (GoI) undertook economic reforms way back in 1991, the manufacturing sector has expanded by leaps and bounds. Goods manufactured in India have been appreciated worldwide because of their supreme quality and robust performance, helping India to emerge as one of the world’s top 10 countries efficient in industrial production as per United Nations International Development Organisation’s new report titled ‘Yearbook of Industrial Statistics 2010’.India leapfrogged Canada, Brazil and Mexico in 2009 to reach the 9th position from the 12th position it held in 2008. The Index of Industrial Production (IIP), the benchmark to measure the rise in industrial activities, clocked a growth of 19.4% in April 2010 as compared to the corresponding month in 2009.
Factors propelling sector’s growth
The domestic manufacturing sector is driven by two critical factors namely increasing domestic consumption, coupled with India being accepted in the global market as a manufacturer of reliable and quality products.
Several verticals in the manufacturing sector are witnessing unprecedented growth, but the question is which factors are driving the growth of the industry. Some of the important factors are as follows:
· Growth in organised retail: This has lead to demand for more specific products along with better packaging, which has subsequently boosted industries engaged in manufacturing packaging items.
· Increase in disposable income: With the Indian economy becoming stronger in the last two decades, there has been an increase in disposable income as well as private consumption spending. Moreover, surging domestic demand is a strong pillar driving the growth of the manufacturing sector.
· Availability of raw materials: Availability of a large pool of resources comprising metals, minerals, oil and gas has played an instrumental role in driving the country’s manufacturing sector.
· Adoption of lean manufacturing process: Lean manufacturing, which helped Toyota emerge as a global automobile giant, has been adopted by domestic auto manufacturers helping them to create more value from limited resources.
· Increasing R&D in the sector: Of late, Indian manufacturers have realised the importance of R&D and are therefore spending a considerable amount on R&D activities, which is giving their products a competitive edge over their global counterparts.
From the point of view of exports, although the impact of volatility in exchange rates did have a temporary negative impact, Indian manufacturers have come to terms with it and have innovated ways and means of increasing their competitiveness. More and more overseas manufacturers and users have accepted that Indian goods as far better and competitive as compared to goods supplied by other global suppliers.
Outsourcing in the engineering industry has increased by leaps and bounds with India emerging as a global manufacturing hub. Several multi-national giants from industries such as automobiles, consumer durables and engineering products, among others have set up their manufacturing units in the country, which is pumping in huge money into the domestic manufacturing sector.
Moreover, availability of cheap and skilled workforce is attracting a number of foreign firms, thereby transforming India into a global manufacturing powerhouse. Thanks to the vital skills in product development, process and capital engineering as well as higher education system churning out innovative minds, the road ahead for the country’s manufacturing sector is looking bright.
Sunil Jain, president of Rajoo Engineers Ltd, a mid-sized manufacturer of plastic extrusion machinery in Rajkot |
