Manufacturing in India on the Rise

The Indian manufacturing industry has been on the rise. The Indian Prime Minister’s ‘Make in India’ program has been implemented to place the country on the world map. India is en route to becoming the fifth largest manufacturing country by the end of this year.

This would effectively lead to a 25% GDP share for the manufacturing segment in the nation. Out of this sector, the major industries gaining popularity include automotive, petrochemical, textiles, electrical, construction, and oil and gas.

Why is the manufacturing industry so competitive in India?

India provides a significant advantage for the growth, development, and sustenance of the manufacturing industry.

Availability of labor resources

India has the second-largest English speaking population in the world. Also, India produces about 1.5 million engineers annually, thus adding to the workforce of the manufacturing industry. All in all, it can provide more than 500 million skilled and unskilled laborers.

Labor cost advantage

India has a history of providing cheap and efficient labor for the manufacturing industry. It forms a viable alternative to the Chinese labor setup. India currently charges $0.92 on average per manufacturing labor hour as compared to China’s $3.52. This provides a huge advantage for the manufacturing industry in the country.

Raw materials

Another feather in the cap of the manufacturing industry in India is the availability of raw materials, at reasonable prices. Many metals are native to this country, so this industry can thrive here and provide a strategic partnership for current and future developments.


The availability of cheap industrial property is also another advantage offered in India. Different states are making adjustments to their real estate to accommodate more industries. Also, family factories are a common concept in India. These family run businesses provide more flexibility and greater attention to detail and lead to successful strategic partnerships.


India has been focusing heavily on investments in technology in the manufacturing industry. In fact, the Government on India has a special budget for the scientific and technological activities, as part of an R&D fund. And this fund allocation is increasing every year. Considering the fact that India’s cumulative FDI investments have reached $91.20 billion very recently, there can be a lot more investments segregated for the technological advancements.

Government Initiatives Helping the Manufacturing Industry

The manufacturing industry has proven to be one of the biggest growth sectors in India. This is also accelerated by the fact that the Government of India has been taking up several different initiatives to push sourcing from India in the country’s economy. Here are some of the most prominent initiatives implemented in the recent past.

The National Policy on Electronics was passed in the early parts of 2019 to work towards the creation of a US $400 billion worth of an electronics manufacturing industry. This has a goal for completion by 2025. Correspondingly, in the years leading up to that, a growth rate of 32% is expected in this segment.

For all manufacturing companies that have a turnover rate up to Rs. 250 crore, the Government of India has reduced the income tax rate to 25%. This has proven to be a huge boost to the manufacturing industry.

Besides, as part of the Mid-Term Review of the Foreign Trade Policy for 2015-2020, the Indian Government has decided to increase incentives for export for labor intensive Micro, Small & Medium Enterprises (MSME) sectors by 2%.


The fact that the output generated from the manufacturing industry in India is positively impacting export is commendable! And this contribution has been growing regularly. This is all thanks to the increasing investments in Indian infrastructure.

The Government of India has also been focusing on investments in the export infrastructure including software technology parks, electronic hardware technology parks, biotechnology parks, etc.

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