Why India

  • Engineering sector employs over 4 million people
  • Raw material resources to meet the demands of the industry
  • Advanced design capabilities and cost effective manufacturing processes

Make in India

Industrial maturity is an important landmark in an economy’s growth path. The sector satisfies the growth requirements of the economy and also generates employment opportunities for the workforce. Since independence, share of agriculture in total GDP in India has consistently declined, down from over 50% in the 50’s to ~14% as of now. But the space ceded by agriculture has been disproportionately filled by services sector.

Globally, services contribute 70% of value added, but only 45% of employment. Empirical evidence suggests positive fallout of manufacturing for external sector and labor productivity. For a growing economy like India, sustainable growth and employment opportunities can only be created once manufacturing starts contributing a higher proportion. Indian industry contributes less than 30% to GDP. Manufacturing has 75% weight in the Index of Industrial Production (IIP).

This leaves a vast potential for the growth of industrial sector. Identifying the competitive advantage in the vast value chain of manufacturing and building upon it would help realize the potential growth opportunities. India has:

  • Strong base of medium and small scale enterprises
  • Vast engineering and scientific pool
  • Leadership in information technology services
  • India has proven competitive advantage in automobiles, pharmaceuticals and medical equipments, besides the employment intensive industries like textiles and garments, leather and footwear, gems and jewellery and food processing. With the easing of investment caps and controls, defense, construction and railways are new sectors that would attract global participation.

    After taking leadership in information technology services, the next wave that India has hitched ride on to is the engineering services & consultancy sector. Need to localize the products to Indian conditions and satisfy the extremely price-sensitive customer has created capability and domain expertise in many areas of engineering. Today, the engineering services and consultancy sector employs over 200,000 engineers. India’s large engineering pool has led to several Indian and global firms establishing product engineering centers in India.

    Future growth would to a large extent depend upon the ability to infuse the talent pool with ‘domain expertise’ and ‘accelerate’ the learning curve.

Recent initiatives to provide conducive environment:

  • Impetus on developing industrial corridors
  • Plan to create smart cities across India
  • Strengthening of IP regime
  • Opening of Hi-value sectors for global participation
  • Liberalization of licensing norms
  • Simplification of approvals and clearances

How to effectively make in India:

  • Assess the business opportunity, policy regime and operating environment at micro level
  • Design value proposition aligned with your companies’ strategic goals
  • Evaluate options to make in India – build vs buy vs collaborate vs JV
  • Develop a robust make roadmap and risk management practices to secure your interest
  • Make in India, realize benefits and keep a close watch on returns on investments

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