india manufacturing

Indian Manufacturing Industry Trend 2019

The Indian manufacturing sector has evolved drastically in the past few years and has become one of the high growth sectors of India. Initiatives such as Make in India and implementation of good and service tax (GST) have been the boosters in the growth of this industry. By 2020, India is expected to become the 5th largest manufactory country. Such a tremendous growth has a majority of made foreign nations positive and confident of India manufacturing industry, such as the International Monetary Fund (IMF) and World Bank Group.

Economy growth projection

Country Expected GDP growth
2018 2019 2020 2021 2022 2023
India 7.3 7.4 7.7 7.7 7.7 7.8
China 6.6 6.2 6.2 6 5.8 5.6
US 2.9 2.5 1.8 1.7 1.5 1.4
European Union 2.2 2 1.8 1.7 1.7 1.6

Source: IMF

In terms of market size, a CAGR of 4.34% is reported for Gross Value Added (GVA) of the India manufacturing sector. The Indian Government aims to raise the gross domestic product (GDP) from present 16% to 22% by 2022 and offer 100 million new job options. The impact of advancing manufacturing business in India and GST has also eased logistic sector. GST redefined business functioning and the supply-chain model with a single tax regime. It has opened gates for domestic and foreign investments.

According to a survey by PwC, the manufacturing industry in India is expected to grow widely by both domestic and global manufacturers. Here, the major reasons for import of raw material are its non-availability, cost, and quality. Whereas, the availability of good quality products at a lower price differentiate India from other nations.

Major hurdles faced by Indian manufacturing business as an exporter are testing procedures, pre-shipment inspection and formalities, labeling regulations and other technical specification. So, to increase the competitiveness and growth of manufacturing industries, the Government is focusing on innovation and technology integration such as

Major initiative for the manufacturing sector

  • National Policy on Electronics (NPE): To create an electronic manufacturing industry of US$ 400 billion by 2025.
  • Exemption of custom duty on 35 machine parts to increase mobile handset production
  • Phased manufacturing program (PMP): To push domestic manufacturing of mobile handsets
  • Hike in GST exemption from Rs 20 lakh to Rs40 lakh
  • Reduction of the income tax rate to 25% for companies with a turnover of Rs 250 crore and less
  • Increased export incentives by 2% for the MSME sector
  • Strategic Partnership model for private companies to tie up with foreign companies when manufacturing armored vehicles, jets, submarines, etc.
  • Modified Special Incentive Package Scheme (MSIPS): To promote large-scale manufacturing. This provides a 20% subsidy on capital investments in special economic zones (SEZs) and 25% on non-SEZz.

Also, the Government organizing various skill programs to increase employment especially in the poor and underdeveloped areas of the nation.

Key takeaways for 2019

  • India manufacturing sector is expected to reach US$ 1 trillion by 2025 as numerous foreign investors can see huge growth potential in this nation.
  • Major focus will be on enlarging export market and strengthening domestic demand.
  • Achieve more than 7% growth in GDP.
  • Easier regulatory process with an opening of more foreign direct investment (FDI) to 51% from the current 49% for large investment and better employment.
  • Reduced waiting period at export gateways for capacity augmentation
  • Reduced procedural delays at with digital platforms and simplified processes
  • Improved safety procedures and manufacturing standards harmonization to ensure compliance with global standards
  • Policy creations that focus on quality and cost to make India excel over other nations
  • Evaluation of existing schemes to remove export and manufacturing constraints

Be ready to see India as a global manufacturing hub. Here is how.

Robust domestic and global demand Increased domestic and foreign direct investment
Initiatives and policy by the Government


Skilled youths to create a large workforce for competitive advantage

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