India will be the key in shaping the future of global economy

  • Interviews
  • May 02,18
Considering the fact that around 90% of industries in India come under the manufacturing sector, SMEs play a critical role in the growth of Indian economy. For India to become a global manufacturing hub, Kalyan Sridhar, Country Manager, PTC India, believes that it is critical to empower the growth of ancillary industries and deploy technology that will result in making the country an efficient manufacturing destination. In this interview, he explains the importance of new-age technologies in rev
India will be the key in shaping the future of global economy

What is driving the Indian manufacturing sector?
Over the last few years, India’s manufacturing and trade sector have witnessed a steady growth. According to Assocham and Ernst & Young, robust domestic demand, Make in India campaign, improved FDI, increase in exports, higher infrastructure spending and capital formation, and supportive fiscal and monetary policies suggest India’s manufacturing sector is headed for a strong growth for the next few years. The sector is also witnessing massive digital transformation. India’s increased investments and commitment to technology development and integration is expected to propel India into the league of global manufacturing hubs in the near future.
Furthermore, there is an upsurge in demand for consumer products, thanks to the growing middle income population in the country by 2025 NCAER predicts the middle income Indians will exceed 500 million. To meet the domestic demand manufacturing sector also witness growth. India is one of the top 4 automotive markets in the world and the growth rate is high owing to the low car penetration ratio. The domestic demand for automotive. As per a PwC report, the demand of passenger cars will be 6 million units by 2020. Hence, the domestic demand shall boast the automotive manufacturing from OEM to its supply chain.
 
How important is India for the global economy?
India continues to remain a critical nation in shaping the present and future of global economy. As per the report by Assocham and EY, India’s overall exports grew by 3.94% to $ 22,543.80 million in the month of July 2017, the eleventh straight month of increase. Exports of engineering goods to China alone grew 123% to $ 629 million during April-June this fiscal. India had the highest improvement in the World Economic Forum’s Global Competitiveness Index, 2016-17, moving up 16 spots to the 39th rank. Furthermore, under the Make in India initiative, the Government of India aims to increase the share of the manufacturing sector in the GDP to 25%, from the current 16%, and to create 100 million new jobs by 2022. Higher employment, growth and exports from India will result positively for the country as well as global economy.
 
What it will take for India to become a global manufacturing hub?
Many of the current challenges have been addressed by the Government of India and they continue to resolve other challenges with good governance and simplification of process. The government’s Banking Regulations Amendment Ordinance is a positive step to address problems of non-performing assets (NPAs), which have been clogging the Indian banking system. Furthermore, the government is committed to provide a conducive environment for the growth of manufacturing.
 For India to become a global manufacturing hub, it is critical to exploit the potential and competitive edge of each state and union territory of India by setting up various industries. Furthermore, empowering the growth of ancillary industries and deploying technology will result in making India to be the destination with an efficient manufacturing hub. There must be a perfect synchronisation between private players and the Government to promote adoption of new technologies, encourage innovation and penetrate into every market to make India a global manufacturing hub.
 
Why is it important for Indian manufacturers to adopt latest technologies?
Government of India’s Make in India and Digital India initiatives have given the necessary boost to the adoption of new technologies such as Industry 4.0, Industrial Internet of Things (IIoT) and augmented reality (AR). The expansion of the initiatives has led to a higher adoption of new technologies in manufacturing, automobile and retail sector. For instance, Blue Star Limited, India’s leading air conditioning and commercial refrigeration company, was looking to improve its operational efficiency across its five modern manufacturing facilities in India. After the due diligence process, during which various software vendors were evaluated, Blue Star Limited selected PTC’s ThingWorx IoT Platform to monitor its factory operations to improve operational efficiency and factory quality. The implementation has enabled Blue Star limited with rapid application enablement, connectivity, machine learning capabilities, augmented reality, and integration with leading device cloud offerings.
 
Adoption of these new technologies puts Indian companies at a better competitive advantage with manufacturers across the 
world. They are able to gain the efficiency, have optimal utilisation of resources and boost productivity which helps them to expand their services beyond India.
 
Which are the sectors, that will benefit the most from new-age technologies?
It is difficult to pin point one particular industry, vertical or a sector that will benefit from new age technology. While early adopters were in manufacturing who have experienced new technologies’ benefits, today, these technologies have permeated into several sectors. Currently in India, every organisation - that has digitally transformed itself with new-age technology solutions - has witnessed robust growth in the last few years and will continue to do till 2020 and beyond.
 
What role can SMEs play in making India a global manufacturing hub?
Considering the fact that around 90% of industries in India come under the manufacturing sector, SMEs, MSMEs and Start-ups will play a critical role in the growth of Indian economy and also in elevating India’s position as a global manufacturing hub. One key aspect that the organisations in the manufacturing sector have to keep in mind is, how they can revolutionise the process of manufacturing and improve the overall of efficiency of the customer through implementation of technologies such as IIoT and AR.
 
Development in these technology fields and improved adoption will transform the way Indian manufacturing eco-system works positively, resulting in elevating India to be the manufacturing hub globally. Another key aspect in this transformation journey is the support that is necessary to the SME/MSME players from the Government of India. Further simplification of process and better financial support from financial institutions can accelerate the journey of India becoming a global manufacturing hub.
 
How critical are modern technologies in India’s mission Manufacturing 2020?
According to a report by PwC, India is expected to become the fifth largest manufacturing country in the world by 2020. Furthermore, the sector is expected to contribute close to 25% of the GDP by 2025. Interestingly, 41% of the respondents from industrial manufacturing are very confident of their company’s growth prospects over the next 3 years. Furthermore, 55% of the respondents have said that growth of their own organisation has outpaced that of the industry group compared to 46% last year. 
 
Further, 35% have said their growth was on par with that of their industry. In terms of profitable growth, about 49% of the respondents believe their margins are likely to increase over the next 12 months, whereas 36% expect their businesses to operate at the same levels of margin. While the prediction does look positive based on the statistics from the report, the achievement of these growth numbers will also depend on how various organisations in the industry digitally transform themselves by adopting technologies such as IIoT, AR, etc. considering the fact that these technologies have the capability to bring in higher efficiency and increase profitability by reducing the overall OPEX of organisations.
 
About Kalyan Sridhar
In his present role, Kalyan Sridhar oversees PTC’s overall business in India, and is responsible for market strategy, growth of the business and leading key partner relationships. He has over 24 years of experience in the IT industry. Prior to joining PTC, Sridhar was the Business Unit Executive - Systems Software at IBM and also held senior positions in IBM. A seasoned leader, he has expertise in scaling up businesses, setting up operations and expanding teams wherever he has worked.

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