In 2021-22, for the first time, India’s exports crossed $ 400 billion and this year, the country has set a target of $ 470 billion (a tall ask given the prevailing external environment). By 2025, India is expected to become a $ 5 trillion economy with manufacturing sector contributing about 25 per cent of its GDP share. The Government of India (GoI) is giving a boost to manufacturing sector by reducing and simplifying tax regimes, and introducing multiple initiatives, such as the Phased Manufacturing Program (PMP) and Production Linked Incentive (PLI) schemes, etc. GoI is aiming for $ 600 billion of manufacturing exports by FY26, increasing India's export share from 2 per cent to 10 per cent by 2047 and promoting 100 Indian brands as global champions.

The success witnessed in electronics sector suggests things are working on the ground. In case of mobile phone manufacturing, exports have grown from mere $0.1 billion in FY17 to about $ 9 billion this year. The government has now set an ambitious target to increase production in the electronics sector to $ 300 billion by 2025-26, a 26 times increase since 2015-16.

Amid global uncertainty, as manufacturing takes off in India, a large talent pool, digitisation and labour arbitrage will be the key differentiators for the sector. With Industry 4.0 (the operation of machinery with technology connected through the Internet), 5G and other advancements, the next few years will be hugely exciting in the manufacturing space. India has an advantage of the world's largest working-age population who are digitally savvy. India's unparalleled base of technology skills and affordable internet access (at $2.5 per cent month) suit well for digital transformation of industries.

For global majors looking for an alternate sourcing destination, India promises to be a serious contender. While the manufacturing sector in India is expected to grow by 9-10 per cent over the next five years (distinctly much more than many other countries in Asia), it has a huge labour supply at about a quarter of costs compared to China. Given the huge untapped domestic market, India is in a sweet spot today.

Manufacturing, regardless of the stage of development, will always provide a multiplier effect. For the last many years, manufacturing sector's contribution to India's GDP has remained between 15-17 per cent.

In this 51 st Edition of IPF Annual, leading industry experts present their "Vision 2025" to make India a $ 1 trillion manufacturing economy. Experts believe that India has a realistic chance to increase manufacturing sector's contribution to 25 per cent because of some favourable factors such as strong domestic demand, rising export opportunities (due supply chain transformation currently underway globally), India’s ability to attract capital for diverse industrial sectors, and the government’s timely policy interventions. Finally, the push to adopt sustainable solutions and new-age technologies will surely make India a leading powerhouse.

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