The Benefits And Challenges Of Manufacturing In India

Manufacturing is one of India’s most rapidly growing industries. With the ‘Make in India’ programme, the government aims to position India as a global manufacturing hub and establish the Indian economy as a worldwide manufacturing powerhouse.

Benefits of manufacturing in India

India is one of the world’s top manufacturing hubs. This is due to easy access to well-qualified engineers and a highly-skilled manufacturing workforce. What’s more, the senior executives and smart managers are able to efficiently bridge the communication with the management of global companies and the employees of the manufacturing facilities in India. 

Cheap labour:

India possesses a large labour pool as almost half of its population, which accounts for 1.2 billion, falls under the working age. India’s hourly manufacturing labour cost is much lower compared to other countries. As of 2014, labour costs for manufacturing on average per hour were $.92 in India, making it more competitive compared to China, where it was $3.52. A lower wage structure and a vast labour market give India a competitive advantage.

Process equipment manufacturing:

Over the past few years, the Process Equipment Market in India has grown faster with substantial growth rates and is expected to grow significantly in the coming years. Many sectors benefit from process equipment manufacturers in India, including chemicals, pharmaceuticals, the food & beverage industry, power, oil extraction, etc. With the increased manufacturing capabilities, numerous opportunities await process equipment manufacturers in India.

Rupee (₹) and quality production:

Due to the depreciating value of the Indian rupee against the dollar, exports are becoming increasingly competitive as the yuan rises in strength. The majority of Indian producers put their faith in and rely on machinery of world-class calibre. This helps them produce high-quality goods.

India’s heat exchanger market: 

According to estimates, the Indian heat exchanger market will reach $890.0 million by 2026, up from $454.4 million in 2018. The government of India has aimed to reduce its dependence on coal and move towards sustainable solutions such as the generation of energy from nuclear power. Heat exchangers have become more prevalent as nuclear power generation is brought into use.

Challenges of manufacturing in India

Poor infrastructure:

India’s economy and industries are plagued by a lack of infrastructure. Only 3% of India’s GDP is used towards infrastructural development compared to China’s 20%. A well-built infrastructure facilitates transportation and ensures a steady supply of energy for production. Many places in India lack well-built roads, making transportation slow and expensive. Poor road conditions and inefficient transportation system poses problems to logistics as well.

Power availability:

Power availability is one of the major drawbacks of manufacturing in India, which decreases productivity, resulting in low output rates. The power supply is expensive and inadequate to meet the daily requirements of the factories. The government of India is working to improve the infrastructural standards to promote the manufacturing sector.

Polarization in qualities of labour:

India boasts about its huge labour population, but we can see high domestic labour quality polarization. The highly educated workers avoid working in industries having poor working conditions and low wages. The uneducated labour population is inefficient and lacks the basic skills required in growing industries.