In India, manufacturers have begun to invest in automation and digital technologies to increase their production, distribution, supply chain, and service functions. Manufacturing in India has followed the traditional practice of mass production for many years, but this has changed over time and intelligent systems have become a necessity. Manufacturers of Industry 4.0 quickly recognized the opportunity to reduce costs, increase production and predict maintenance requirements.
Industry 4.0 will enable the manufacturing industry not only to cope with the complexity caused by the demand for personalization of mass products, but also to respond to changes in its supply chains.
Much has been written about the importance of Industry 4.0 and how it can help manufacturers to increase visibility, reduce costs, shorten production times and provide exceptional customer support. According to Deloitte India partner, "Deloitte Indians" can no longer afford to miss the sustainability train, and the increasing awareness and innovation that leads to sustainable manufacturing is something a company can do. Given the chaos of 2020, it is time for industries to reconfigure their procurement and manufacturing capabilities to capitalize on India's advantages in raw materials, skills, and entrepreneurial activities and build an ecosystem that supports a multi-tier industry ready to take over global manufacturing.
Digital technologies such as the Internet of Things and robotics are changing the global production landscape in the so-called Fourth Industrial Revolution (Industrial 4.0). Increasing investment in these technologies is driving the traditional manufacturing forces of the twentieth century to the forefront of competition. While large-scale production dominates some segments of the value chain, innovative manufacturing models such as decentralized, small-scale, and local manufacturing in combination with production ecosystems and agile manufacturing are emerging to exploit these new opportunities.
With the introduction of Industry 4.0, the fourth industrial revolution will be shaped by new technologies that enable the automation of manufacturing processes. India has announced the introduction of a new production policy that will increase its share of GDP to 25% and consolidate the Industrial Revolution (4.0) of "Make in India.". At the same time, it will make India the Atmanirbharta of the manufacturing sector, boosting governments "manufacturing base to ensure steady growth relative to the services-based economy.
This will help India build a sustainable, game-changing ecosystem to support global businesses and achieve production-driven growth. As highlighted in the industry survey, India has adopted digital technologies to achieve its goal of becoming a global manufacturing hub. The technological advantage, greater impetus for infrastructure development, and the world's best labor laws have placed a strong focus on India's manufacturing capabilities for global companies.
To meet the goal of increasing manufacturing's contribution to India's GDP from 16% in 2015 to 25% by 2022, India's manufacturing sector will need to grow from $300 billion to $1 trillion. With an incremental capital ratio of 45-60%, which becomes more favourable for productivity gains, India's manufacturing sector will need a total of $10 trillion to $15 trillion of investment over the next seven years to double its productive GDP over the same period, provided India increases its GDP (measured value chain) to 25%.
A new and focused approach to industrial policy can stimulate the growth of India's manufacturing value chains, increasing their productivity, providing secure know-how and technology, and access to capital.
For India's manufacturing economy to reach $1 trillion by 2025, units of production must be transformed into smart units of production. As India's manufacturing industry rapidly turns to technology, it must confront the obstacles that affect the introduction of connected factories. Without a workforce, many manufacturing industries will not be able to restart their factories and businesses.
This means that the benefits of India as a nation with an industrial network, abundant natural resources, and cheap labour will lead many manufacturers to turn to India as an alternative location. Many manufacturing values chains in India operate in close proximity to a strong domestic market. Such ready-to-use industrial parks will help attract companies around the world that are reluctant to invest in asset purchases but want to benefit from the availability of cheap labour. India's large domestic market will ensure that exports and domestic production go hand in hand.
Establishing a government agency such as UKTI (UK Trade and Investment) would enable India to attract manufacturers from around the world to join the local supply chain in a structured way.
In India make in version two is on the beak to consolidate the ground for further growth in selected manufacturing sectors. The annual growth rate of manufacturing output in India, 2013-2019, chart. The GOI should support the manufacturing industry as manufacturers understand that parts of our social, business, and political environment have grown in the wake of the COVID-19 pandemic and are investing in shaping a new normal.
If we look at the implementation areas of 46 smart manufacturing success stories in India, more than half of them (27%) have precise targets for improving the supply chain and production. The study also shows that 92% of executives in industrial manufacturing admit innovation is important for their future revenue growth, and two-thirds of executives in all sectors believe that their companies should have a clear innovation strategy - a trend that is as much a sustainability drive as a priority for companies to mitigate the negative impact of the industrial production environment.