Role Of Manufacturing In Indian Economy
                     Role Of Manufacturing In Indian 
Economy
Neel Rao
Writes on Reitz India's ID Fans and FD Fans & 
Induced draft fans and forced draft fans from Reitz 
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The manufacturing sector has so far emerged as one of the most crucial components 
of every developed and developing country. It plays a major role in a nation’s 
development and economic growth.
Research and development usually start in the manufacturing sector, as 
manufacturers strive to meet the demands in the market. The development of new 
technologies, products, and processes is constantly taking place in the field of 
manufacturing.
Statistics Regarding Manufacturing In India
Here are some of the statistics and trends that the manufacturing sector in India 
currently shows:
• 17.4% of India’s GDP in the fiscal year 2020 came from manufacturing.
• During the period during 2018 to 2019, manufacturing contributed 29.6% of the 
country’s GDP (at current prices)
• India currently holds great potential to become a leading manufacturing hub.
• Despite the impact of the pandemic, the manufacturing activity has been growing 
steadily and the Indian economy is growing.
The economy is indeed facing certain challenges at the moment. However, it is likely 
to start recovering from the slowdown at a good pace quite soon.
Large Manufacturers Vs MSMEs
In the fiscal year 2019, the micro, small and medium enterprises (MSMEs) 
contributed around 29.7% of India’s GDP. MSMEs also play a major role in the supply 
chain, accounting for approximately 40% of the overall exports. Essentially, MSMEs 
act as major growth accelerators for the country’s economy. Due to the pandemic, 
the MSMEs face several problems. Even before the pandemic, other factors such as 
various external events and government policies used to pose challenges. This, 
however, is changing as a result of various government schemes that benefit this 
sector.
What Factors Contribute To The Manufacturing Sector In India?
The Indian government took several major initiatives, including Atma Nirbhar Bharat 
(self-reliance India) and Make in India to boost manufacturing. The COVID-19 
pandemic has led many nations to shift their manufacturing from China to India and 
other southeast Asian countries. Two of the other notable factors are:
Production Capability
India holds an advantageous point in the global manufacturing market due to plenty 
of benefits. These include large volumes of domestic raw materials production, 
reliable suppliers, and plenty of specializations. The Indian manufacturers can carry 
out high-quality production runs, thanks to the country’s strong capabilities in terms 
of engineering and technology.
Manpower
The easy availability of labor makes India a viable alternative to China for many of 
the other countries. Moreover, India also houses the second-largest population of 
English speakers globally, with a large section of the Indians being bilingual. This, 
together with the impressive number of engineers in India ensures plenty of 
manpower.
Conclusion
India is capable of increasing its manufacturing competitiveness. This would help the 
country become a preferred supplier for its target group of consumers. An 
improvement in infrastructure and logistics through government policies would 
certainly be helpful. The potential of the country’s manufacturing sector, in the long 
run, continues to attract global companies. Currently, India is undergoing an 
important stage of reform and development and has become a popular investment 
destination.
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