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Infrastructure, Innovation, Incentives: The Three I's Driving India's Manufacturing Ambition As this sector evolves, it's attracting many global players keen to explore the vast opportunities the Indian market presents

By Sushant Rampuria

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India's manufacturing sector is undergoing a revolutionary transformation, marked by significant advancements in infrastructure, innovation, and incentivization. As this sector evolves, it's attracting many global players keen to explore the vast opportunities the Indian market presents. In this dynamic environment, firms like Enterslice are pivotal in guiding companies through their greenfield investments in India.

Infrastructure: The Backbone of Manufacturing Growth

The Indian government's substantial investment in infrastructure development has been crucial in enhancing the country's manufacturing appeal. In recent years, the government has allocated an impressive $1.5 trillion under the National Infrastructure Pipeline (NIP) for 2019-2025.

This investment is directed towards upgrading transportation networks, including a 68% increase in highway construction in 2020 compared to the previous year and the development of 100 smart cities. Through projects like the Sagarmala Programme, enhanced port connectivity aims to reduce logistics costs for both domestic and international trade.

Additionally, initiatives like the UDAY scheme have significantly improved power supply reliability, with a remarkable reduction in transmission and distribution losses, which decreased from 21% in 2017 to around 18% by 2020.

These developments in infrastructure not only bolster existing industries but also lay the groundwork for new ventures, especially in remote areas previously untapped due to logistical constraints. The amalgamation of these efforts positions India as a formidable player in the global manufacturing landscape, ready to attract substantial foreign investment and technological collaborations.

Innovation: The Catalyst for Competitive Manufacturing

A surge in innovation is at the heart of India's industrial transformation, fundamentally altering its manufacturing ethos. The adoption of Industry 4.0 technologies is not merely a trend but has become a cornerstone for businesses striving for competitiveness in a global market. Advanced technologies such as Artificial Intelligence (AI), the Internet of Things (IoT), and robotics are being integrated at an unprecedented scale. This integration is catapulting efficiency and productivity to new heights. For instance, AI-driven predictive maintenance reduces downtime by up to 45%, while IoT applications in supply chain management enhance transparency and speed.

Furthermore, robotics in manufacturing has seen a 30% year-on-year growth, signifying a rapid shift towards automation. This technological revolution is not confined to enhancing current processes. Still, it is paving the way for entirely new paradigms such as precision manufacturing, where accuracy and quality are paramount, and green technologies, which are crucial for sustainable growth. The Indian manufacturing sector, once known for its labour-intensive approach, is now at the forefront of adopting these smart technologies, aligning with global standards and setting new benchmarks. This shift clearly indicates that India is not just following but leading in the era of intelligent manufacturing, ready to embrace the challenges and opportunities this new wave of innovation brings.

Incentives: Fueling Growth and Attraction

The Indian government's incentivization policies have been pivotal in attracting foreign investments, mainly through initiatives like the 'Make in India' campaign and various tax benefits. For instance, under the 'Make in India' initiative, the government has targeted a jump in the manufacturing sector's GDP share from 16% to 25% by 2022. This ambitious goal is supported by substantial tax incentives, including reducing corporate tax rates for new manufacturing firms to 15%, one of the lowest in Asia. Additionally, FDI inflows in India's manufacturing sector saw an impressive increase, attracting around $70 billion of FDI between April 2014 and December 2019, showcasing the tangible impact of these policies.

Moreover, the government has streamlined approval processes and provided land acquisition support for companies contemplating greenfield projects. The Production-Linked Incentive (PLI) scheme, another landmark policy, is expected to generate manufacturing revenue worth $520 billion in the next five years. These incentives are not just trimming initial investment risks but also offering long-term financial benefits, making India an increasingly attractive destination for global manufacturers. Such proactive measures by the government are a testament to India's commitment to reshaping its manufacturing landscape and positioning itself as a global manufacturing leader.

Facilitating Greenfield Investments in India

Companies often seek guidance from seasoned experts when navigating India's promising yet complex market landscape. This is where firms like Enterslice come into play. Specializing in business consultancy and market entry services, Enterslice assists companies in leveraging these three I's. "Our role is to help businesses understand and utilize India's evolving infrastructure, embrace innovation, and benefit from the government's incentives for manufacturing," says Narendra Kumar, Co-Founder of Enterslice.

Bittu Kumar, Co-Founder of Enterslice, adds, "Greenfield investments are a significant undertaking, especially in a diverse market like India. Our expertise lies in providing end-to-end support, from regulatory compliance to strategic business planning, ensuring a smooth and successful entry into the Indian manufacturing sector."

The Future Outlook of India's Manufacturing Sector

Looking ahead, the trajectory for India's manufacturing sector is highly promising. With continuous improvements in infrastructure, a relentless push for innovation, and a steady stream of incentivization policies, India is well on its way to becoming a global manufacturing hub.

The combination of infrastructure, innovation, and incentives creates an unprecedented opportunity for India's manufacturing sector. With expert guidance from firms like Enterslice, companies looking to make greenfield investments in India can navigate this landscape with confidence and clarity. The future of manufacturing in India is bright, and it beckons global entrepreneurs and investors to participate in this exciting journey.

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