Manufacturing in India Poised for Great Progress in 2024

India has been gaining traction as a global manufacturing hub. There has been tremendous untapped potential for this market to become a greater force in global manufacturing given the country’s massive population and its position as the world’s third largest economy by purchasing power parity as of 2024. Many foreign manufacturers have begun opening up operations in India through equity joint ventures, strategic alliances, or wholly owned subsidiaries. These entering manufacturers operate mainly in the automotive, engineering, chemicals, pharmaceuticals and consumer durables sectors (Patel, 2024).

Last week, the Indian Government unveiled a plan to incentivizing India’s growth in domestic manufacturing with $1.3 billion awarded to private companies boosting local manufacturing over the next year. This figure is in addition to the over $500 million already distributed. These incentives have effectively lowered manufacturing costs in the country (Tiwary, 2024).

Boston Consulting Group credit’s the rise in activity to India’s geopolitics: it promises less government intervention, fewer intellectual property concerns, and a lower probability of disruptive tariffs on international trade than China offers. Many manufacturers have been adding Indian locations to hedge the risk associated with their Chinese operations. BCG also cites India’s large trainable workforce and low labor costs as catalysts of it’s growing enterprise.

The Federation of Indian Export Organizations has projected that that nation’s exports are likely to rise to $900 billion in 2023-24 from $770 billion the previous year on rising demand from companies around the world (Kashyap, 2023).

Many companies like Apple, Motorola, Lenovo, have recently opened moved production to India and as a result electronics exports have more than doubled over the last two years from $10.6 billion in 2021 to $22.7 billion in 2023. This sector has also been influenced by a new range of import tariffs and restrictions on imported mobile phones, laptops, and tablets. Apple currently makes 7% of its smart phones in India and this number is projected to rise to 25% in the coming years (Bahree, 2023).

India’s factories themselves have been undergoing some transformation. Usage of smart factory technology such as Internet of Things and Artificial Intelligence are on the rise with the first fully integrated smart factories emerging in 2024. Environmental concerns and a growing demand for sustainably produced products have been driving an increase in renewable energy source integration, optimized resource utilization, and other eco-friendly practices. The growing presence of global manufacturers has also spurred an increased focus on data security (A Sneak Peek…, 2024).

Market entrants have not all been in the electronics sector: Boeing opened a $200 million engineering center in India on January 19th and India Prime Minister, Narendra Modi, believes that we can expect Boeing and Airbus to “rapidly build an aircraft manufacturing ecosystem in the country” (Tiwary, 2024).

Renewables manufacturing has been gaining momentum in India. India’s Finance Minister, Nirmala Sitharaman will be presenting the Union Budget on February 1st, 2024. This budget is expected to include restructured tax schemes aimed at aiding in hydrogen demand creation. Last year’s Union Budget included $4 billion in “Green Growth” investment including viability gap funding for 4GWh of hydrogen production projects. The goal is to integrate 500GW of non-fossil fuel energy generation by 2030 (Colthorpe, 2024).

ACS is proud to be a part of this India manufacturing boom (the first shipments were sent out of our newest production facility in India in June) and we will strive to use our manufacturing expertise to enable local noble industries with automotive exhaust, and safety components, industrial insulation, green energy products, and more. Reach out to us today with all of your custom engineered mesh needs. Our global production network, our painstakingly perfected processes, and our world leading R&D and Engineering teams will ensure that we deliver the perfect components for your application.

Works Cited

“A Sneak Peek at the Evolving Manufacturing Landscape in 2024.” Manufacturing Today, 22 Jan. 2024, Accessed 25 Jan. 2024.

Bahree, Megha. “India’s Manufacturers Cash in as Brands Seek Refuge from US-China Tensions.” Al Jazeera, 6 Sept. 2023, Accessed 25 Jan. 2024.

Colthorpe, Andy. “India Urged to Incentivise Energy Storage Manufacturing and Deployment with Union Budget.” Energy-Storage.News, 22 Jan. 2024, Accessed 25 Jan. 2024.

Kashyap, Karan. “How India Is Emerging as a Production Hub for Global Exports.” Forbes, 21 Dec. 2023, Accessed 25 Jan. 2024.

Lewis, Morgan. “India: Emerging as a Manufacturing Powerhouse.” JD Supra, 19 Jan. 2024, Accessed 25 Jan. 2024.

Patel, Shivam. “India to Pay Incentives Worth $1.32 Bln under Manufacturing Scheme This Year.” Reuters, 17 Jan. 2024, Accessed 25 Jan. 2024.

Tiwary, Shivansh. “India PM Modi Says Won’t Be Long before Boeing Makes Aircraft in India.” Reuters, 19 Jan. 2024, Accessed 25 Jan. 2024.