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India Advanced Manufacturing Sector

The Indian manufacturing industry is on the threshold of change and is projected to be one of the fastest growing sectors.  Government initiatives coupled with technological advancements have stimulated innovation.  The share of the manufacturing sector in India’s GDP is around 16-17% at constant prices and around 14% at current prices.

The gap in demand and supply has spurred the requirement for increased capacities and the Indian manufacturing sector is expected to offer several opportunities for investment and trade.  There is also a gradual shift in the focus of Indian industry to more automated and process driven manufacturing.  Companies previously dependent on labor intensive practices are now looking towards increased automation to minimize uncertainties and maximize productivity.

Both the Government of India and Indian companies recognize the need to move forward to the next and latest phase of industry.

  • The National Manufacturing Policy of the Government of India aims to increase the share of manufacturing in GDP to 25% by 2025.
  • The “Make in India” policy of the Government of India is expected to increase the demand and consumption for machinery and equipment by the local manufacturing industry.
  • Introduced in 2020, the Production-Linked Incentive (PLI) scheme was launched by the Government of India to incentivize companies to increase productivity and global competitiveness.  Currently, the PLI scheme specifically targets the development of 14 sectors to grow on par with global manufacturing standards: mobiles, medical devices, telecom and networking products, automobiles and auto components, pharmaceuticals, drugs, white goods, specialty steel, electronic products, food products, textile products, solar PV modules, advanced chemistry cell battery, and drones and drone components.

India is gradually progressing on the road to Industry 4.0 through the Government of India’s initiatives.  Technologies relating to automation, robotics, IoT, artificial intelligence, and big data analytics are gaining traction.

Smart Advanced Manufacturing and Rapid Transformation Hubs or SAMARTH Udyog Bharat 4.0 is one of the initiatives by the Government of India’s Ministry for Heavy Industries & Public Enterprises to enhance competitiveness in the capital goods industry.  They have created demonstration centers or hubs called Common Engineering Facility Centers (CEFCs) to spread awareness about Industry 4.0 among Indian manufacturing companies.

CEFCs have been established at the following institutions:

  • Center for Industry 4.0 (C4i4) Lab Pune, Savitribai Phule Pune University.
  • Indian Institute of Technology Delhi and Automation Industry Association’s (AIA) Foundation for Smart Manufacturing.
  • Industry 4.0 India at the Indian Institute of Science (IISc) Factory R&D Platform, Bengaluru.
  • Smart Manufacturing Demo and Development Cell at the Central Manufacturing Technology Institute (CMTI), Bengaluru.
  • Industry 4.0 projects at the Department of Heavy Industry Center of Excellence in Advanced Manufacturing Technology, Indian Institute of Technology Kharagpur, West Bengal.

The market challenges in India include a price conscious market, underdeveloped infrastructure and supply chains, and a leaning towards labor intensive processes owing to the availability of low-cost labor and technology being expensive.

However, India is on the path towards adopting more technology in its manufacturing processes arising from the need to reduce the competitive gap and to take advantage of challenges in China.  End-user segments such as aerospace/defense, automotive, and information and communication technology are the source of this demand for more high-end equipment and machinery.

Launched in May 2022, the U.S.-India initiative on Critical and Emerging Technology (iCET) serves to develop strategic technology partnerships between the two countries.  iCET has opened the door on U.S.-India collaboration across a range of areas including artificial intelligence, quantum technologies, advanced wireless, in building resilient semiconductor supply chains, and increased opportunity for joint research and development.

Trade Events

U.S. companies may consider the following local trade shows to showcase their technologies and meet Indian companies:

The experienced U.S. Commercial Service team in India can help your market entry or expansion in the Indian subcontinent. For further information regarding opportunities in this sector, please reach out to your local U.S. office or contact the U.S. Commercial Service in India.