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India: A responsible leader in the evolving manufacturing sector
Articles- Apr 12,24
India's growing manufacturing sector, coupled with its commitment to sustainability, presents a unique opportunity for the country to become a global leader in responsible manufacturing, says Marc Jarrault
The global manufacturing landscape is undergoing a significant transformation driven by technological advancements, shifting policies, and evolving consumer demands. In this dynamic environment, India stands poised to emerge as a leader in responsible manufacturing.
India's rise in manufacturing sector positions it as a powerhouse in the global economy. It contributes over 15 per cent to the national GDP, boasting a vast pool of potential skilled workers and a robust infrastructure network that attracts global investments. Government initiatives like ‘Make in India’ and ‘PLI schemes’ have spurred significant investment, with FDI equity inflow in the manufacturing sectors increasing by 55 per cent over the last decade. With a goal of becoming a $10 trillion economy by 2030, India is prioritizing growth in sunrise sectors like renewable energy, electric vehicles, and advanced manufacturing technologies. Positive signs are evident looking at the strong new order growth and increasing manufacturing output. Additionally, India's manufacturing output has risen steadily for 33 months, reaching a peak in March 2024.
Several advantages for manufacturers make India a compelling choice. Competitive labour costs, combined with government incentives such as tax breaks and subsidies, make it cost-effective to manufacture here. India also boasts an abundant talent pool of skilled engineers, scientists, and technicians, with over 1.5 million graduating annually in engineering and technology fields. Furthermore, Indian companies are increasingly investing in research and development, with spending growing by over 13 per cent in the last five years. This fosters a dynamic ecosystem for developing cutting-edge solutions and keeping pace with technological advancements. LAPP India's commitment to innovation aligns with this trend. The company's focus on developing proprietary compounds exemplifies its dedication to pushing the boundaries of cable and connectivity technology.
One key driver boosting Indian manufacturing transformation is automation. Indian manufacturers are embracing robotics, freeing up human workers from repetitive tasks. This allows them to focus on higher-value activities that leverage their skills and ingenuity.
The changing face of manufacturing presents both challenges and opportunities. Industry 5.0 is an emerging paradigm that emphasizes human-centricity, customization, and data-driven decision making. Smart factories with interconnected machines, intelligent automation, and real-time data analysis will become the norm. The global artificial intelligence in manufacturing market size is anticipated to reach $20.8 billion by 2028.
Environmental concerns are a top priority. Manufacturers are adopting sustainable practices to reduce their carbon footprint, minimize waste, and utilize renewable energy sources. The global green technology & sustainability market size is expected to reach USD 79.65 billion by 2030, according to a report by Grand View Research Inc. Global trade and supply chain disruptions are leading companies to diversify their manufacturing locations. This presents an opportunity for India to become a reliable and resilient manufacturing hub.
Indian consumers are increasingly conscious of environmental impact. Over 70 per cent of Indian consumers are willing to pay a premium for products which are sustainably produced or environmentally friendly. Local manufacturers can cater to this growing demand by focusing on eco-friendly production methods and sustainable materials.
As India recognises the importance of sustainable manufacturing, the government has set ambitious targets for reducing carbon emissions and promoting renewable energy. Several initiatives are underway to encourage eco-friendly practices in the manufacturing sector such as promoting waste reduction, reuse, and recycling through regulations and incentives, aiming to achieve a 50 per cent reduction in waste generation by 2030.
The Bureau of Energy Efficiency (BEE) has helped India reduce its carbon emissions by 306 million tons annually. Contributing to India's national goal of reducing energy intensity, India is witnessing a significant increase in renewable energy production. India's installed Renewable Energy (RE) capacity is estimated to increase to 170 GW by March 2025 from a level of 135 GW in December 2023, with solar and wind power leading the way. This shift towards clean energy sources helps power manufacturing facilities and reduces reliance on fossil fuels.
India's growing manufacturing sector, coupled with its commitment to sustainability, presents a unique opportunity for the country to become a global leader in responsible manufacturing. By overcoming challenges, fostering innovation, and attracting investment in clean technologies, India can create a future where economic growth goes hand-in-hand with environmental well-being.
References:
- FICCI
- MarketsAndMarkets
- Grand View Research
- Statista
- Bureau of Energy Efficiency of India
- ICRA
About the author:
Marc Jarrault is the Managing Director of LAPP India, which is a one stop solution provider for cable and connection technology.
Indian manufacturing sector
sustainability
Marc Jarrault
LAPP India
FICCI
MarketsAndMarkets
Grand View Research
Statista
Bureau of Energy Efficiency of India
ICRA
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