Manufacturing Industry Growth in India and Hiring Trends

The manufacturing landscape in India is experiencing a notable uptick in investment, particularly in sectors like automobiles, electronics, and textiles fueling the manufacturing industry growth in India. These industries are emerging as frontrunners in propelling the country’s manufacturing growth. Key government initiatives, such as ‘Make in India’, have played a pivotal role in fostering a conducive business environment, attracting investment, and fostering domestic manufacturing capabilities. Regulatory processes have been streamlined, facilitating smoother operations for businesses. The implementation of Production-Linked Incentives (PLIs) has also provided a significant impetus to various manufacturing sectors. In addition to ‘Make in India’, initiatives like the Bharatmala Pariyojana Project, the proposed DESH Bill, Skill Development Initiatives, Infrastructure Development, Ease of Doing Business Reforms, and the National Logistics Policy have further enriched opportunities within the industrial domain.

With the manufacturing sector currently contributing around 17% to the GDP, projections indicate a growth potential to reach 21% in the coming 6-7 years. This trajectory underscores India’s capacity to fortify its position within global supply chains. 

Government Initiatives for Manufacturing Industry Growth in India

Make in India (2014): Launched in 2014, this flagship initiative aims to foster a favourable environment for domestic and foreign investments in manufacturing across 25 pivotal sectors, encompassing automobiles, electronics, textiles, and pharmaceuticals. “Make in India” has garnered notable international interest, drawing investments from global industry leaders across diverse sectors.

India continues to attract significant foreign direct investment (FDI), reaching $25.53 billion in FY 2023-24, supporting its GDP growth projection of 6% to 6.8% in 2023-24. Climbing from 142nd to 63rd in the Ease of Doing Business Ranking 2020 and to the 40th position in the Global Innovation Index, India showcases a favourable business environment. With exports surging to $770.18 billion and emerging as the world’s second-largest mobile phone producer, India aims to become a $5 trillion economy by 2025, driven by a growing population expected to reach 152.2 crore by 2036.

India’s infrastructure development includes industrial corridors and 21 new industrial cities, supported by investments from Japan. Initiatives like the Smart Cities Mission and the Sagar Mala project aim to modernise infrastructure. Simultaneously, reforms in sectors like defence, civil aviation, and pharmaceuticals, allowing increased FDI, signal India’s commitment to fostering innovation and economic growth.

Production Linked Incentive (PLI) Scheme (2021): Introduced in 2021, the PLI scheme encompasses 14 sectors, including telecommunications, white goods, textiles, medical device manufacturing, automobiles, speciality steel, food products, high-efficiency solar PV modules, advanced chemistry cell batteries, drones, and pharmaceuticals, with an allocation of Rs 1.97 lakh crore. As of November 2023, PLI schemes have attracted investments exceeding Rs 1.03 lakh crore, resulting in production/sales totalling Rs 8.61 lakh crore and generating over 6.78 lakh jobs. The PLI scheme has been a catalyst for investment, driving companies to enhance their manufacturing capabilities and adopt innovative technologies. With 746 applications approved, it has garnered investments totalling 1.07 lakh crore. This is in line with the global shift towards automation and smart manufacturing, where data exchange and interconnected systems are paramount.

The allocation of 70-80% of the scheme towards environmentally friendly initiatives is anticipated to stimulate green investments in India. This encompasses sectors like fuel cell technology, electric vehicles, solar photovoltaic (PV) systems, and ACC batteries. The ratio of incentives to capital expenditure varies across different sectors, reflecting a tailored approach to incentivising investment based on sector-specific considerations.

According to the Indian Staffing Federation, this massive boost in production due to the PLI scheme has the potential to double the existing workforce across sectors.

Infrastructure Development: Many Infrastructural Development initiatives by the government are fueling the manufacturing Industry growth in India, some of which are:

  • Sagarmala Initiative (2016): This endeavour concentrates on enhancing port infrastructure, logistics, and coastal connectivity to bolster maritime trade and export competitiveness.
  • Bharatmala Project (2015): This ambitious initiative seeks to establish a comprehensive network of highways, expressways, and logistical corridors to enhance connectivity within India and with neighbouring nations.
  • Dedicated Freight Corridors (DFCs): These specialised railway lines are designed to accelerate freight transportation, thereby lowering costs and enhancing supply chain efficiency.

Ease of Doing Business Reforms: The government is leading initiatives to improve the business environment by simplifying processes, reducing compliance burdens, and implementing key reforms like GST introduction, corporate tax reduction, labour code enactment, FDI policy reforms, and measures to boost domestic manufacturing. These efforts aim to create a favourable business and economic environment.

The key focus areas of the initiatives are: 

  • Simplifying procedures related to applications, renewals, inspections, filing records, etc.
  • Rationalisation by repealing, amending or subsuming redundant laws 
  • Promoting digitisation by creating online interfaces to eliminate manual forms and records 
  • Decriminalising minor technical or procedural defaults

Hiring for Manufacturing Industry in India

India’s manufacturing sector is on the cusp of a transformative leap, aiming to bolster its GDP contribution to 25% by 2025. The hiring for the manufacturing sector is on the rise with a plethora of job opportunities, particularly in high-growth areas like automotive, electronics, and textiles, fueled by domestic demand and export prospects. Technological advancements, including automation and AI, are expected to reshape the sector, necessitating a skilled workforce adept in modern manufacturing practices. According to TeamLease’s Employment Outlook Report H2FY24, 74% of the employers have projected incremental workforce expansion and 69% incremental new hiring for manufacturing, with Chennai, Bangalore, Hyderabad, and Coimbatore emerging as the top cities for recruitment in this sector.

Building a combination of technical and soft abilities is crucial for individuals eyeing a successful career in the manufacturing sector. While the knowledge of automation and robotics is critical for enhancing efficiency and production, the capacity to analyse and understand data from sensors and machines helps in process optimisation and decision-making. Similarly, understanding CAD and CAM software and technical troubleshooting skills are important for ensuring smooth production.

Addressing Skill Shortages

The rapid adoption of Industry 4.0 technologies such as AI, ML, and automation has resulted in a skills gap within the manufacturing industry. A survey reveals that 74% of manufacturing executives struggle to find qualified candidates for roles in these specialised areas.

To address this demand-supply gap, collaborative efforts between educational institutions and industry stakeholders are underway. These partnerships aim to develop specialised training programs and certification initiatives tailored to equip workers with the necessary skills, thereby bridging the divide between talent availability and industry requirements in the evolving landscape of Industry 4.0.

Initiatives like the National Apprenticeship Promotion Scheme (NAPS), Pradhan Mantri Kaushal Vikas Yojana (PMKVY), Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY), and Pradhan Mantri Yuva Udyamita Vikas Abhiyan (PM-YUVA) are spearheaded by the Government of India. These programs are designed to foster apprenticeship training and skill enhancement among the nation’s youth, aiming to alleviate skill shortages and cater to the demand for industry-aligned competencies.

Final thoughts

India’s manufacturing industry is experiencing robust growth driven by government initiatives like Make in India and the Production Linked Incentive (PLI) Scheme, alongside infrastructure development projects. This growth has led to increased hiring, especially in sectors like automotive, electronics, and textiles, fueled by domestic demand and export opportunities. However, addressing skill shortages remains challenging, with initiatives like NAPS and PMKVY aiming to bridge the gap. With collaborative efforts, India is poised to strengthen its position in global supply chains and contribute significantly to economic growth.

Author

Subburathinam P

Chief Strategy Officer
TeamLease Services Limited

Latest Blogs

Manufacturing Industry Growth in India and Hiring Trends

Hiring for Manufacturing Industry in India India's manufacturing sector is on the cusp of a transformative leap, aiming to bolster its GDP contribution to 25%...

Read More

Navigating Growth and Challenges in the Indian FMCG Sector in India

Technological Advancements and Digital Transformation: Technology is playing a pivotal role in shaping the future of the FMCG brands in India. From digital marketing and...

Read More

Working With a Multigenerational Workforce: Benefits and Challenges

Benefits of a multigenerational workforce Each workforce from a different generation has a unique perspective shaped by their experiences, upbringing, and cultural influences; they bring...

Read More

Growth of Hospitality Industry in India 2023 and Prospects for 2024

Surging Opportunities and Hiring Trends in 2024 Fueled by a surge in travel, India experienced a remarkable 50% increase in hiring for tourism and hospitality...

Read More

Telecom Industry in India: The evolving landscape

Inventory in the Telecom Sector: In the telecom sector, inventory encompasses a range of tangible and intangible assets crucial for operations. This includes physical infrastructure...

Read More