The manufacturing sector in India has the potential to elevate much of the Indian population above poverty by shifting the majority of the workforce out of low-wage agriculture. In any country, the manufacturing sector is the backbone of any economy as it enhances growth, productivity, employment and strengthens agriculture and service sectors. Astrological growth in worldwide distribution systems and IT, coupled with the opening of trade barriers, has led to the increasing growth of the global manufacturing network. This has been designed to take advantage of the low-wage with an efficient workforce of India.
In India, manufacturing has emerged as one of the high growth sectors in India. India is now emerged as a manufacturing hub and has given global recognition to the Indian economy. By the end of the year 2020, India is expected to become the fifth largest manufacturing country in the world. In both advanced and developing economies manufacturing remains a critical force. New opportunities and challenges to business leaders and policymakers have changed the business sector.
The manufacturing sector remains critically important to both the developing and the advanced world. The developing countries provide a pathway from subsistence agriculture to rising incomes and living standards. It provides a vital source of innovation and competitiveness, making outsized contributions to research and development, exports, and productivity growth. The manufacturing sector has changed by bringing both opportunities and challenges. The business owners and policymakers cannot rely on old responses in the new manufacturing environment.
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| source: thehindhuonline.com |
Manufacturing’s role is changing as an ambitious target has been set by the Government of India for increasing the contribution of manufacturing output to 25 percent of Gross Domestic Product (GDP) by 2025 from the current 16 percent.
By 2025, it is expected that India’s manufacturing sector will touch US$ 1 trillion. The manufacturing sector also has the potential to account for 25-30 percent of the country’s GDP and create up to 90 million domestic jobs by2025. In the Indian manufacturing sector, the business conditions will continue to remain positive. As wages rise, consumers had more money to spend on services and manufacturing growth accelerates. This makes it more important than manufacturing as a source of growth and employment.
After recovering from the great recession the advanced economies hiring in manufacturing ay accelerate and some nations may even raise net exports. Manufacturers will continue to hire workers both in production and nonproduction roles.
It is expected that by 2025, in developing countries new global consuming class will have emerged and the majority of consumption will take place which will create rich new market opportunities. In established markets, demand is fragmenting as customers ask for greater variation and more types of after-sales service.
Companies should understand the needs of emerging markets and also the need of the existing customers. They will also need agile approaches to the development of strategy by making use of scenario planning rather than point forecasts. They will also have to make big bets on long-range opportunities like tapping new markets in developing economies or switching to new materials with minimum risks.
For policymakers, to support manufacturing industries and competing globally means that policy must be grounded in a comprehensive understanding of the diverse industry segments in a national or regional economy. They should also recognize that the long-term goals for growth, innovation, and exports are best served by supporting critical enablers for manufacturers. This will help them forge the connections needed to access the rapidly growing emerging markets.
The manufacturing industry in India is competing in the global marketplace and registering high growth over a year-to-year basis but large sections of the Indian manufacturing sector still suffer from the use of primitive technology, poor infrastructure, expensive financing, and bureaucracy.
When a business invests in a foreign country then there is foreign direct investment. This is either by acquiring a foreign business that controls or starts a business in a foreign country. Though global economies are suffering from financial crises and financial hurdles, India is still a global investment destination. From time to time Indian government is framing new policies to meet the current requirements and benefits of the nation. Foreign direct investment plays an important role in enhancing the level of economic growth and development by enhancing the financial position of the country.
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