Some three decades back in the 1980s, China initiated its first move towards world domination by entering the global manufacturing market, as a producer of low-end products. This intend escalated with time, and finally in 2010, China overtook the US, and emerged as the largest manufacturing hub in the world. What worked in favor of the countryâ€™s success were the factors like world-class infrastructure, logistics, complete policy support to the sector, as well as cheap labor cost. As per the estimation of the UN Statistics Division, in the year 2018, China was accounted for 28 percent of the global manufacturing output. They were unstoppable, until the COVID pandemic broke lose this year, revealing the inherent weaknesses in the existing global supply chain and the worldâ€™s over-reliance on Chinaâ€™s manufacturing industry.
This, right here, is a rare opportunity for India, and it can capitalize on it by creating a manufacturing-friendly environment and a skilled labor force, while offering lucrative deals to global players for setting up units in India, and emerge as the next global manufacturing hub.
The Current Scenarioâ€¦
Apparently, recently the prolonged China-US tariff battle had made a bunch of global companies rethink their decision of keeping all their manufacturing centers concentrated in a country. And the deal was sealed after the supply shock created by the sudden Chinese shutdown due to COVID-19 outbreak, laying bare the vulnerabilities of the existing global manufacturing supply chains. Global companies from countries like Japan and the United States (US) have even shared their interest to diversify their manufacturing capacity beyond China, and added India among others to the list of relocation destinations as part of the process to move.
Indiaâ€™s Roadmap to be the Next Global Manufacturing Hub
Meanwhile, with the launch of Atmanirbhar Bharat Abhiyan (Self-Reliant India Mission) in May 2020, Prime Minister, Mr. Narendra Modi has conveyed his intend to merge the global with the local, to generate manufacturing investment, and emerge as the new global nerve center of international supply chains in the post-Covid world.
However, in order to attract international organizations to set up their manufacturing units in this country, India has to be able to exhibit a best in class manufacturing ecosystem that offers efficient and highly skilled manpower, encourages innovation, allows ease of doing businesses and safeguards intellectual property rights.
To achieve that, our first step should be to work towards fostering innovation, in order to bolster our capabilities in all kinds of production ends. In addition to that, we need to boost manufacturing infrastructure to create greater mechanization skills in the country.
Apart from innovation, the need of the hour for an aspiring manufacturing hotspot is an exceptionally skilled pool of human resources in the field. With rapid technological advancements, and adoption of the same becoming the norm in every sector, the existing jobs are going through a process of evolution, along with tons of newer job roles emerging every day. The introduction of automation in every sector has created a demand for specialist workers such as automobile analytics engineer, 3D printing specialists, apparel data analyst etc. to fulfill the futuristic requirements, which India needs to take care of immediately by boosting its skilling ecosystem.
Through the launch of various schemes like â€œMake in Indiaâ€ and â€œSkill Indiaâ€, the Indian government has already initiated on its goal of leveraging the manufacturing sector to create millions of jobs for its countrymen. Skilling the today and tomorrow of this country is going to be a stepping stone towards achieving that goal.
That brings us to, generation of foreign direct investment (FDI), and the good news is, a tremendous improvement has been noticed in Indiaâ€™s policy on Foreign Direct Investment (FDI) and ease of doing business since 2015. India has jumped 79 positions from 142 in 2014 to 63 in 2019, as stated by the World Bankâ€™s Ease of Doing Business Ranking 2020. All it need now is to climb up a few more ranks, and capture a rank in the top 50 to become a global player in manufacturing.
In conclusion, it is high time for the Indian manufacturing sector to rise to the occasion, and prepare a solid plan of action to grab every last bit of this opportunity, served in the form of a shifting manufacturing business. Furthermore, with a dash of futuristic approach, the Indian market and the manufacturing sector can utilize its abundance of potential to reach greater heights, and cater to the multiple manufacturing requirements of global industries.