1. Boost from Union Budget 2024
The Union Budget 2024 introduced several initiatives aimed at strengthening India’s manufacturing sector. Key highlights include an allocation of INR 2,403 crores (USD 315 million) to support electronics and IT hardware manufacturing. Additionally, a Production-Linked Incentive (PLI) of INR 760 billion (USD 9.71 billion) was earmarked for semiconductor manufacturing, aiming to position India as a leading global producer of semiconductors.
2. Emergence of Smart Manufacturing
India is rapidly embracing smart manufacturing technologies such as IoT, AI, blockchain, and 3D printing. Companies like Larsen & Toubro, ABB India, Siemens, and Schneider Electric are integrating automation into their production processes to increase operational efficiency. The State of Smart Manufacturing Report highlighted India as a global leader in digital manufacturing investments.
3. China Plus One Strategy
India continues to benefit from the “China Plus One” strategy, where global firms diversify manufacturing operations beyond China. Companies like Apple, Motorola, and Lenovo have significantly increased production in India. Apple now manufactures about 7% of its iPhones in India, a figure projected to rise to 25% in the coming years.
4. Electronics & Mobile Manufacturing Surge
The electronics sector, especially mobile manufacturing, witnessed substantial growth. Electronics exports more than doubled from USD 10.6 billion in 2021 to USD 22.7 billion in 2023, driven by production from global giants like Apple and Samsung. The government’s focus on import tariffs and restrictions on mobile phones and laptops has further fueled domestic production.
5. Automotive Sector Growth
India remains a dominant player in the global automotive industry. Passenger vehicle sales hit 334,130 units in November 2023, marking the highest-ever sales recorded for that month. Electric vehicles (EVs) continue to drive growth, with Mahindra & Mahindra announcing an investment of INR 10,000 crores (USD 1.23 billion) in EVs under Maharashtra’s industrial promotion scheme.
6. Sustainability and Green Manufacturing
Sustainability is becoming a major focus for Indian manufacturers. The government’s “Green Growth” initiative, backed by a USD 4 billion investment, aims to achieve 500GW of non-fossil fuel energy generation by 2030. Companies are now prioritizing renewable energy, optimized resource utilization, and eco-friendly production practices.
7. Increase in Export Projections
The Federation of Indian Export Organizations (FIEO) projected India’s exports to rise from USD 770 billion in 2022-23 to USD 900 billion in 2023-24. The diversification of production, especially in electronics, automotive, and green energy products, is seen as a key contributor to this growth.
8. Growth in MSMEs
Micro, Small, and Medium Enterprises (MSMEs) continue to play a vital role in India’s economic growth. With consistent contributions to India’s GDP, MSMEs are driving job creation and supporting India’s industrial transition from an agriculture-based economy to a manufacturing powerhouse.
These developments reflect India’s growing influence as a global manufacturing hub, driven by government incentives, foreign direct investments, and technological advancements.