Here’s something to be proud of: Under the Global Innovation Index, India ranks number 1 in the Central and Southern Asia region. Now, that’s encouraging. What’s not is that we rank number 81 globally.
At present, India’s manufacturing sector has a target of contributing 16 percent of our GDP to the nation’s coffers. By 2025, the sector is expected to deliver 25 percent. With the government raising the bar, the industry has a daunting task ahead. Daunting, yes, but well within grasp.
A recent projection by Deloitte revealed that over the next five years, India is expected to capture the fifth spot in the list of most competitive manufacturing nations in the globe. Just saying that lights you up, doesn’t it. India’s manufacturing sector is projected to touch US$ 1 trillion by 2025.
The sector is expected to create up to 90 million domestic jobs by 2025, with ‘Make in India’ serving as the booster rocket we needed for lift-off.
Govt. Steps It Up
“We’re seeing a lot of government related policies like Make in India, Digital India, and GST acting as a catalyst to drive business. We’re now bound to comply with digitization,” said Balaji Kulkarni, Global Head – IT Infrastructure & Applications, Crompton Greaves.
In light of ‘Make in India’, the Government has received investment proposals of over US$ 3.05 billion, as of mid-2015.
The Indian engineering sector is divided into two major segments – heavy engineering and light engineering. The capital goods and engineering turnover in India is expected to reach US$ 125.4 billion by FY17. Likewise, Electrical equipment market size is forecast to reach US$ 100 billion by FY22.
Let’s take a step back. Industrial production was transformed by steam power in the nineteenth century, electricity in the early twentieth century, and automation in the 1970s. These waves of technological advancement did not reduce overall employment, however.
Although the number of manufacturing jobs decreased, new jobs emerged and the demand for new skills grew. Today, another workforce transformation is on the horizon as manufacturing experiences a fourth wave of technological advancement: the rise of new digital industrial technologies.
How will this next wave of industrial evolution play out? Will it create or destroy jobs? How will job profiles evolve? And what types of skills will be in demand?
The answers to these questions are critical to business leaders and policy makers. This is because they seek to take full advantage of the opportunities arising from a technologically empowered industry – By ensuring that an appropriately skilled workforce is in place to capture them.
Comparative advantage vis-à-vis peers in terms of manufacturing costs, market knowledge, technology and creativity has been a driving force for engineering exports from India. Engineering exports from India stood at US$ 70.6 billion in FY15, registering a Compound Annual Growth Rate (CAGR) of 11.1 per cent over FY08-15.
Companies engaged in the engineering sector are virtually on a roll. Capacity creation in sectors like infrastructure, power, mining, oil & gas, refinery, steel, automotive, and consumer durables has been driving demand in the engineering sector. Separately, the approval of significant number of special economic zones (SEZs) across the country and the development of the Delhi Mumbai Industrial Corridor (DMIC) across seven states is expected to further bolster the engineering sector.
With 100 per cent Foreign Direct Investment (FDI) allowed through the automatic route, and initiatives like ‘Make in India’, major international players have entered the Indian engineering sector due to significant growth opportunities available. Cumulative FDI in the sector totaled US$ 26.6 billion over April 2000–May 2015.