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Collaboration between automotive and IT sectors is needed to localise Indian software solutions

By Prashanth Doreswamy President and CEO, Continental India,

Added 25 January 2024

The article, acknowledging the progress that has been seen through Make in India, lays down the hurdles present in the Indian manufacturing sector, and charts a path to overcome these challenges while capitalising on the country’s advantages in the current scenario.

The India advantage

Skilled Workforce: India has a wide talent pool of STEM-educated individuals who are equipped with English language skills. India contributed 34 per cent of global STEM graduates in 2021, as per the UNESCO Institute for Statistics. The total number of STEM graduates in India was two million in 2019, and this number is expected to grow to 10 million by the year 2025. This perfect blend of technical expertise and language competence has played a huge role in India's rise in the global manufacturing picture. India's skilled workforce has therefore been a facilitator in the implementation of advanced technologies and has also played a key role in enabling seamless alliances in the world market.

Geographical Advantage: India houses some of the most prestigious institutes and has a younger population equipped with proficiency in STEM and the English language. Moreover, the availability of resources makes it even more attractive as a destination for MNCs to invest.

India as the alternative: With the recent global changes, there has been an accentuation of India's significance as an alternative to a single-nation dependency, notably China. The pandemic exposed certain vulnerabilities, like supply chain management, which highlighted the risk of being dependent on one specific region. India is an upcoming manufacturing hub with the advantages of its geographical location, skilled workforce, growing economy, ease of doing business, and favourable policies. In many ways, India is today the preferred choice globally as a manufacturing hub.

Industry 4.0 adoption

Industry 4.0 Practices: The manufacturing industry is undergoing a significant transformation regarding the way products are produced. Due to the process of digitisation, industry 4.0 has reinvented industrial processes to boost efficiency and productivity, optimise costs, and provide value to customers, among others, by using advanced technologies. It has inspired the industry to be more competitive and innovative while contributing to the manufacturing value chain. It is a catalyst in India's manufacturing evolution, and smart technologies such as AI, IoT, and automation foster efficiency, precision, and agility. Continental has implemented AI/ML and robotics at different levels at their plants. Thus, India is moving towards a sustainable and tech-driven manufacturing setup.

India as a manufacturing hub

Foreign direct investment (FDI) in Indian manufacturing has soared in the last 10 years, with an average annual growth rate of more than 12 per cent. The manufacturing sector accounts for 15-16 per cent of India's total GDP. The sector employs around 12 per cent of India's total workforce, which drives the economic growth of the country. Despite all the global challenges, India has averaged 6.15 per cent GDP growth from 2006 to 2023 and reached 8.7 per cent in 2022.

In summary

India has become an attractive manufacturing hub, with huge multinational companies setting up their offices and manufacturing centres in the country. The various initiatives and policies introduced in the country have further improved the ease of doing business, inviting many more such organisations to invest in the country. This has led India to become a self-reliant country, gradually decreasing its dependence on exports. Looking ahead, India will continue to play a critical role in influencing the global manufacturing landscape with its tale of spirit, adaptation, and unmatched potential.

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