The role of promoting local manufacturing in strengthening India's economic freedom – Express Mobility News

By: Pankaj Sharma

From the laying of the foundations of industrialisation in the 1950s and 1960s to permission-based manufacturing between 1965 and 1980. And then the catalytic change brought about by liberalisation in the 1990s and the current size of the Indian manufacturing sector, which contributes over 17% of our GDP and employs over 28 million workers. India has certainly come a long way in building a robust manufacturing sector that can not only serve the needs of India but also become the manufacturing hub for the rest of the world.

In today's age of modernization and technology-driven markets, the manufacturing sector is key for a country to maintain its technological independence while reducing its dependence on import-oriented supply chains.

In the current geopolitical scenario, India is emerging as the preferred manufacturing hub of the world. Major technology giants like Apple, Boeing and others are increasing their investments in India as they recognize India's ability to produce world-class products through its manufacturing credentials.

Apart from making India the manufacturing hub of the world, more and more Indian companies are shifting their manufacturing to the country. This is a crucial step in India's journey towards economic independence and enables a large section of its citizens to play an active role in the manufacturing sector.

One sector where manufacturing would play a major role is the revolution we are currently seeing in electric vehicles and stationary storage. India has set a target of making 30% of its vehicles electric by 2030 and has committed to generating 500 gigawatts of renewable energy by 2030. These are bold numbers for a developing country like India, but current adoption figures suggest that India is well on its way to achieving these ambitious goals while also driving its industry and targeted GDP growth.

India today imports its entire supply of lithium-ion cells from abroad and is also heavily dependent on imported electronic components, particularly microprocessors and silicon chips. With the advent of domestically developed electric vehicles and stationary storage systems, India is looking to revolutionize its manufacturing sector by setting up local lithium-ion cell production in the country. India has also taken major steps to set up semiconductor fab manufacturing, enabling India to domestically produce the chips and wafers that form the building blocks of microprocessors and other key electronic components in the near future. These major strides in India's manufacturing targets are an indicator that India is moving up in its value chain in the manufacturing sector.

More and more domestic companies are expanding their manufacturing facilities and becoming Tier 1 and Tier 2 suppliers of materials and components used in other industries. India is aiming for supply chain independence and is preparing to create an ecosystem where the Indian manufacturing sector can rely largely on domestically produced components to produce the final product. A country that is as little dependent as possible on import-based supply chains stands a better chance of achieving economic independence and eliminating its dependence on foreign imports.

The other major advantage that India has over some of its neighbouring countries is the foreign trade agreements that India has entered into with other countries. India virtually has the opportunity to become the manufacturing hub for the global south and also for the developed countries. The country is supported by the largest democratic system, a vibrant talent pool of engineers and manufacturing experts and a large domestic market. India has the opportunity to not only become the manufacturing hub of the world but also become an export-oriented economy where many domestically developed products intended for the Indian market can find their way to other export markets.

When India gained independence in 1947, it was hard to imagine that it would soon become one of the world's leading industrial nations. However, India has systematically invested in building its basic manufacturing capabilities, ranging from steel, cement and pharmaceuticals to automobiles. Today, the manufacturing sector generates over $470 billion in foreign exchange for the country and this is an indicator that with the right policy framework and Indian entrepreneurial spirit, India is on its way to achieving economic and technological independence.

The author is co-founder and director of Log9 Materials

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