INDUSTRIAL SECTOR AND ITS GROWTH PROSPECTS IN INDIA .

Posted By:- Abhinav Kumar (Director)

Industrial manufacturing is a major growth sector for the Indian economy with diverse companies, including those engaged in manufacturing of machinery and equipment, electrical and metal products, cement, building and construction material, rubber and plastic products and automation technology products. Specifically after the
launch of ‘Make in India’ program by our Prime Minister, Mr Narendra Modi, India has gained a spot on the world map as a manufacturing hub and has given global recognition to the Indian economy. Owing to the growth prospects, government aims to create 100 million new jobs in this sector by 2022.

Key Growth Areas

• Industrial leaders in India are looking at digitalising their vertical and horizontal value chains from product development and purchasing to manufacturing, logistics and services.
• Apart from investing in new product development, manufacturers are moving to offer product and service rather than offering only product.
• Efforts are being taken to form multi-national partnerships, alliances and joint ventures in order to secure FDI, benefit from advanced technologies, and improve productivity through factory automation.
• In addition to focussing on domestic market, Indian manufacturers are also looking to gain a foothold in the global market by increasing sales in existing markets and by identifying new geographies.

Government Initiatives for Promoting Industrial Sector

The Government of India has taken several initiatives to promote a healthy environment for the growth of industrial sector in the country. Some of the notable initiatives and developments in the industrial sector are:

• In May 2021, the government approved a PLI scheme worth Rs. 18,000 crore (US$ 2.47 billion) for production of advanced chemical cell (ACC) batteries; this is expected to attract investments worth Rs. 45,000 crore (US$ 6.18 billion) in the country, and further boost capacity in core component technology and make India a clean energy global hub.
• In India, the market for grain-oriented electrical steel sheet manufacturing is witnessing high demand from power transformer producers, due to the rising demand for electric power and increasing adoption of renewable energy in the country.
• To facilitate manufacturing and investment in sectors such as ICT and telecom, in May 2021, TEMA (Telecom Equipment Manufacturers Association of India) signed a collaboration deal with ICCC (Indo-Canada Chamber of Commerce) to promote ‘Make in India’ and ‘Self-reliant India’ initiatives.
• India's display panel market is estimated to grow from ~US$ 7 billion in 2021 to US$ 15 billion in 2025.
• The Mega Investment Textiles Parks (MITRA) scheme to build world-class infrastructure will enable global industry champions to be created, benefiting from economies of scale and agglomeration. Seven Textile Parks will be established over three years.

Conclusion and interpretation

Industrial production in India surged 134.4 percent year-on-year in April of 2021, the biggest increase ever, beating market forecasts of a 120 percent gain. A low base effect from last year is weighing on the data as production fell at a record 57.3 percent in April 2020 when the majority of the establishments were not operating and many units had no production due to the coronavirus lockdown. Big rises this year were seen for manufacturing (197.1 percent), mining (37.1 percent) and electricity (38.5 percent).

This industry is non-restrictive and vast; also, the demand and supply gap is quite large. Hence, the graph of industrial sector is expected to move upward in the next couple of months.