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One World, One Industry: India Makes Manufacturing Gains to Participate in a Global Economy

The manufacturing industry is truly a global one. While the past few decades have seen the rise of manufacturing in China and countries throughout Europe and South America, the last 10 years have been marked by significant progress in India. While the greater Asian area has flourished, India has been hampered by many factors including a struggling infrastructure.

These difficulties with infrastructure won’t impede growth in India, but still need to be addressed to ensure expectations don’t fall short of desire. Especially considering the “Make in India” initiative, launched in 2015 by Indian Prime Minister Narendra Modi, which pitches India as a business-friendly destination to attract foreign businesses to invest and manufacture in the country.

While the Indian government has taken several initiatives to promote a healthy environment for the growth of the manufacturing sector, they are cognizant of the local communities’ needs and how the implementation of new projects will impact cities versus remote villages.

With that said, according to Industry Week, India is predicted to be in the top five manufacturing nations in the world by 2020. Currently, India is the third-largest economy in purchasing power parity after the United States and China. On top of that, it has a large population of engineers and factory workers, its intellectual property is widely respected, and it is easy to find English-speaking managers from India. Despite this, India still faces a workforce issue.

Like the United States, Europe, and much of the world, India is facing a skills gap and workforce development issue. Because of the “Make in India” program, many foreign companies are vying to bring manufacturing to India. Apple’s recent announcement of opening a manufacturing plant in Bengaluru means big things for India and its economy.

However, like many new manufacturing facilities, Apple will likely take advantage of both advanced manufacturing and the Industrial Internet of Things (IIOT) to create an automated plant. While this still means jobs for India, those jobs may be out of the technical range of those currently trained to traditional manufacturing practices.

This is of serious concern to India, as by 2020, the country will boast more than 900 million people of working age[1]. It is estimated that two years later, India will pass China to become the most populous country in the world. To add to these concerns, the Labor Ministries’ data estimates around one million people will enter India’s workforce every month.

Along with this growth, India continues to excel in the automotive sector. The Indian automotive industry is one of the largest in the world with an annual production of 23.96 million vehicles in 2015–16, following a growth of 2.57% over the last year. The automobile industry in India also accounts for 7.1% of the country’s gross domestic product (GDP)[2]. The government also has a plan for the faster adoption and manufacturing of electric and hybrid vehicles, known as the National Electric Mobility Mission 2020. The goal of this is to encourage progressive introduction of reliable and affordable electric vehicles into the country.

As business leaders, we should continue to watch the burgeoning manufacturing economy of India as they work hard to achieve success in the global community. IPC will continue to work hard to support the manufacturing economy in India as the country grows to further become a participant in the international electronics industry.

References

1. India’s population explosion will make or break its economy, Majumdar and Riley, CNN Money, April 2016.

2. Automobile Industry in India, IBEF, June 2017.

John Mitchell is president and CEO of IPC—Association Connecting Electronics Industries. To read past columns or to contact Mitchell, click here.

To read the full version of this column which appeared in the August 2017 issue of The PCB Magazine, click here.