Synopsis
India is emerging as a key player in global manufacturing despite geopolitical tensions and trade challenges, according to the Economic Survey 2024-25. The report highlights the potential for growth through R&D investments and innovations, particularly in sectors like steel, cement, and automobiles.Key Takeaways
- India holds 2.8% of global manufacturing share.
- Industrial sector expected to grow by 6.2% in FY25.
- Automobile sector saw 12.5% domestic sales growth in FY24.
- Government extends PLI Scheme for automotive sector.
- Need for coordinated efforts to boost manufacturing.
New Delhi, Jan 31 (NationPress) India continues to shine on the global manufacturing stage despite ongoing geopolitical tensions, aggressive trade and industrial policies, disruptions in supply chains, and a global slowdown in trade. The Economic Survey 2024-25 emphasizes that nurturing investments in R&D and fostering innovations aimed at enhancing the growth and formalization of smaller manufacturers will significantly contribute to growth across various sectors.
The manufacturing landscape worldwide has experienced notable transformations over the last decade, with India emerging as a dynamic economy that has gradually filled the void left by developed nations.
Currently, India holds 2.8 percent of the global manufacturing share, in contrast to China’s 28.8 percent, presenting a substantial opportunity for India to ascend in this arena. The potential to boost the industrial sector's contribution to GDP is considerable in comparison to similar nations.
In light of the IMF’s insights regarding the shift of manufacturing production towards emerging market economies, particularly China and India, the Survey states that India is well-positioned to capitalize on global industrial diversification trends.
The forecast for India’s industrial growth in FY25 is anticipated to surpass the average of the previous five years. The industrial sector is projected to grow by 6.2 percent in FY25, primarily fueled by robust advancements in electricity and construction.
Industries such as steel, cement, chemicals, and petrochemicals have stabilized industrial growth, while consumer-oriented sectors like automobiles, electronics, and pharmaceuticals are emerging as key growth drivers.
India currently ranks as the second-largest cement producer globally, trailing only China. From April to November of FY25, the production of crude steel and finished steel in the country grew by 3.3 percent and 4.6 percent, respectively.
The Indian automobile sector significantly contributes to economic growth, providing a wide array of domestically manufactured vehicles. In FY24, domestic sales in this industry increased by 12.5 percent. Acknowledging the sector's potential, the government has extended the PLI Scheme for an additional year.
The Economic Survey indicates that analyzing state-level data reveals that business reforms at the state level are likely to promote industrial development.
“To achieve India’s goal of becoming a formidable manufacturing hub, persistent and coordinated efforts from all levels of government, the private sector, skilling ecosystems, academia, R&D institutions, and financial stakeholders are essential,” the Survey document advocates.
In a challenging global context, it emphasizes the necessity of sustained, collaborative efforts from all government tiers, private sector entities, the skilling ecosystem, academia, R&D institutions, and financial stakeholders to fulfill India’s aspirations as a manufacturing powerhouse.
