News Brief
Manufacturing's Share In India's GVA To Reach 21 Per Cent By 2032, Driven By Rs 1.97 Lakh Crore PLI Push And Capital Expenditure
India's Manufacturing Sector (Illustrative Image)
India’s manufacturing sector is set for a major transformation, with its contribution to Gross Value Added (GVA) expected to increase significantly from the current 14 per cent ($459 billion) to 21 per cent ($1,557 billion) by 2032. A report by Sharekhan outlines the potential growth and highlights the sector’s vital role in driving the country’s economic future.
Projected Growth
The manufacturing sector's incremental contribution to India’s economy is projected to exceed 32 per cent. This growth underscores its essential role in India’s economic transformation and the country's ambition to become a $10 trillion economy by 2034.
Government and Corporate Capital Expenditure Driving Growth
One of the key drivers of this manufacturing boom is the robust capital expenditure (capex) by both the government and corporations.
Significant investments in infrastructure—ports, railways, highways, and power—are laying a solid foundation for manufacturing expansion.
India’s Domestic Market
Production-Linked Incentive (PLI) Scheme:
A significant catalyst for this growth is the government’s Production-Linked Incentive (PLI) scheme, launched in 2020. With an allocation of Rs 1.97 lakh crore (over $24 billion), the PLI scheme spans 14 critical sectors, including electronics, textiles, pharmaceuticals, automobiles, telecom, and renewable energy. It incentivises manufacturers based on measurable outcomes like increased production and incremental sales.
As of August 2024, the PLI scheme has achieved remarkable success with Rs 1.46 lakh crore in actual investments, production worth Rs 12.50 lakh crore, and approximately 9.5 lakh jobs created, both directly and indirectly.
India’s Vision for Global Manufacturing Hub
India’s ongoing investments in its skilled workforce and infrastructure development, coupled with efforts to enhance exports, align with the broader vision of Atmanirbhar Bharat (self-reliant India). With strong policy support and targeted investments, India’s manufacturing sector is poised to emerge as a global hub.
