Manufacturing is the engine for India’s economic growth and plays a pivotal role in the country’s sustainable and equitable growth. It has the potential to generate employment for a skilled, semiskilled as well as a non-skilled workforce and capitalize on the demographic dividend that the country enjoys.
While the sector has played a fundamental role in opening up the Indian economy to foreign investment and investors, created opportunities for domestic manufacturers to grow and compete in foreign markets and placed India among attractive destinations for investments, Indian manufacturing has a long way to go before it achieves the National Manufacturing Policy (NMP) set target of contributing 25 per cent to the GDP, and realizes it’s true potential.
Given the strong potential and the far reaching impact of manufacturing in employment generation, investments and infrastructure development, both the Government and the industry acknowledge
its strategic importance and see a central role for manufacturing-led industrial development of the economy. However, the current economic environment presents various challenges. Macro
economic issues such as moderation in GDP growth, rising inflation, high interest rates and the widening current account deficit, coupled with micro-economic issues such as a complex business regulatory framework, sluggish implementation process of industrial reforms, high compliance costs, inadequate infrastructure, rigid labour norms, time consuming clearances and approval processes, land acquisition issues, rising instances of industrial disputes and non-availability of requisite workforce have impacted the entire industry. This environment has not only hampered manufacturing growth, but also the overall growth of the Indian economy.
Therefore, the need of the hour is a robust decision making and policy implementation system to revive and re-ignite growth in manufacturing. The Government has already initiated the process of implementing the NMP and notified 12 National Investments and Manufacturing Zones (NIMZs) across the country. These zones will help overcome various challenges and issues faced by
manufacturing today and facilitate high manufacturing growth, but urgent need would be to expedite setting up these notified NIMZs. Complementing these measures is the 12th Five Year Plan focus on
promoting manufacturing by developing capabilities across sectors, especially through technology, innovation and R&D in core sectors, and the setting up of the Cabinet Committee on Investment (CCI) to fast track clearance for large projects.
However, bringing convergence on important policies such as the Land Acquisition and Rehabilitation Bill, the MMDR Act, and the implementation of GST as well as the alignment of national and state manufacturing priorities will be essential for manufacturing to achieve its true potential.
CII has submitted a list of large scale manufacturing projects to the Government for consideration by the CCI with a recommendation that projects below Rs 1000 crore be reviewed as well to spur the investment cycle in the country.
CII is also working with the Government in easing business regulations in the country and is constituting a ‘Task Force on Ease of Doing Business’ that would make recommendations to simplify doing business in India. CII will work closely with the Government and various stakeholders to make manufacturing in India more attractive.
Undoubtedly, a strong manufacturing sector and its healthy growth is crucial for ensuring high GDP growth, creating additional employment opportunities, reducing inequalities and increasing investments and global competitiveness. CII hopes continuous time-bound efforts and ongoing reforms will help put manufacturing back on a high growth trajectory.


