How manufacturing can be the game changer for India?

Amit Gossain, Managing Director, KONE Elevator India

Manufacturing has emerged as one of the high growth sectors in India. Government of India aims to create 100 million new jobs in the sector by 2022. The sector’s Gross Value Added (GVA) at current prices was estimated at US$ 350.27 billion as per the first advanced estimate of FY21. The manufacturing GVA accounts for 19% of the country’s real gross value added. As per the latest survey, capacity utilisation in India’s manufacturing sector stood at 63.3% in the second quarter of FY21.

The manufacturing sector of India has the potential to reach US$ 1 trillion by 2025. The implementation of the Goods and Services Tax (GST) will make India a common market with a GDP of US$ 2.5 trillion along with a population of 1.32 billion people, which will be a big draw for investors. With impetus on developing industrial corridors and smart cities, the Government aims to ensure holistic development of the nation.

Make in India Mission

Make in India mission will help drive India on a path of becoming the hub for hi-tech manufacturing as global giants are in process of setting up manufacturing plants in India, attracted by India’s market of more than a billion consumers and an increasing purchasing power. India has become one of the most attractive destinations for investment in the manufacturing sector.

With the government also taking initiatives in providing the sector incentives as well as policy support with the Atmanirbhar Bharat initiative, manufacturers now need to adopt technology in the production processes. To fulfil the larger goal envisioned by this initiative, a successful and robust manufacturing industry will spell economic success and development for India in the coming times.

Some suggestive measures that the government can take to improve manufacturing and Make in India initiatives are- to increase productivity and taking our quality standards to world class standards via skill development and other training programs, simplification of labour laws, further removing bureaucratic barriers of starting new businesses or expanding business in India. Also, importantly, improving our infrastructure – road, rail and air as well as warehousing and logistics facilities which will all help in smooth transaction of business and also improve India’s global standing in Ease of Doing business.

Digitization of Manufacturing, India’s production power

COVID-19 has shown organisations that they need to move to smart manufacturing and flexible supply chain models that are digitally enabled. Diverse sourcing and digitization will be key to building solider, smarter supply chains and ensuring long-term recovery.

Given the current pandemic situation, India can take advantage as brands across the world are looking for an alternative source of supply. In this regard, AI, data analytics and IoT can help enhancing and accelerating the entire process. With real-time data, manufactures can now manage quality control, automate production process and at the same time keep track of latest trends to innovate production process according to customer demand. Manufacturers can also utilize this technology to ensure safety and environment norms are being followed in order to boost employee health and morale. Thus, manufacturers can scale up their production, streamline the process and enhance productivity to meet their customer demands all at the same time.

Distributed Manufacturing – Creating an ecosystem

Advances in technology such as digital twins, artificial intelligence, cloud and edge computing, and pervasive systems integration are converging on manufacturing. It’s not the technology, but the ecosystems they issue, that will shape the decades to come. Manufacturers must learn how to do business and compete in a new era of innovation-driven ecosystems.

The ability to share resources is one of the benefits of an ecosystem. Cloud computing technologies provide opportunities for an ecosystem to exchange data and tools more effectively. We are at an inflection point in manufacturing technology adoption, where new digital infrastructure and platforms are catalysts for the fourth industrial revolution—only if the ecosystem evolves to support and leverage the infrastructure for higher levels of digital connectivity, orchestration, and optimisation in the manufacturing value chain.

As the Indian government calls upon the nation to buy products locally made by Indian companies, manufacturers are expected to gain an edge through this endeavour and sales will increase significantly in the coming years.  With continued government support, India is expected to emerge as the manufacturing hub, in the foreseeable future. To make India self-sufficient and a global manufacturing hub, infrastructural growth is the key.

India is today transitioning from a situation where it opened its doors to liberalisation and globalisation to one where it has to rearm itself to become a competitive manufacturing hub, a self-reliant country that can face war and pandemics, and a comfortable investment destination where the world can relocate to capitalise on its huge and talented manpower and geographic advantages.

Another aspect that is expected to accelerate India’s growth is innovation in the manufacturing industry. The uncertainty created by the global pandemic and the allocation of relief package for a self-reliant India presents numerous opportunities for creative disruptions across verticals.

Initiatives undertaken by Industry

Industry 4.0 is signalling a change in the traditional manufacturing landscape. Also known as the Fourth Industrial Revolution, Industry 4.0 encompasses three technological trends driving this transformation: connectivity, intelligence and flexible automation. There are many industries in India today who are leveraging the power technologies like Industrial Internet of Things, Big Data, Cloud computing, Additive manufacturing (AM), Advanced robotics, Augmented and virtual reality (AR/VR).

Despite the pandemic, investment in smart manufacturing will rebound. Although the current pandemic forced many organisations to pause some innovative IoT deployments, IoT will be a key ‘return to growth’ accelerator with selected use cases being safe bets for end users to focus on in order to reach a new level of automation, remote everywhere experience and hyper-connectivity.

In addition, government initiatives and investments to promote the concept of smart factories are also starting to propel Industry 4.0.  In India, the government has created SAMARTH-Udyog Bharat 4.0 to interpret Industry 4.0 among the country’s manufacturers and aggressively pursue the creation of a smart factory ecosystem. The Indian government estimates that only around 10% of manufacturers currently have an Industry 4.0 roadmap in place.

India’s manufacturing industry is clearly moving in the direction of industry 4.0 where everything will be connected, and every data point will be analysed. Indian companies are at the forefront of R&D and have already become global leaders in areas such as pharmaceuticals and textiles. Areas such as automation and robotics also receiving the required attention from the industry.

Going forward, the government will play a pivotal role in creating manufacturing and export-friendly policies to aid the private sector in India to push forward the agenda of employment and economic growth.

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of ET Edge Insights, its management, or its members

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