India, a Rising Economic Powerhouse in Manufacturing

India demonstrates an assortment of strengths that underpin its potential to be a global economic and manufacturing powerhouse. Attesting to it is the S&P Global Market Intelligence report that estimates it to be the third-largest economy, overtaking Japan and Germany by 2030. The following article discusses the advantages that can help our industries, including the machine tool and other sunrise sectors, evolve and propel the nation to its predicted position.

Investments flow when chances are favorable. The successful enterprises we see today are the ones that have explored markets, expanded their range and footprint, and invested time and resources consistently. Such companies are a testament to the adage that success comes over a while.

The location is also a major factor that drives investment. Many foreign firms including American companies eye India for long-term investment prospects, not only for cost arbitrage advantage but also for the future growth opportunity. Aided by India’s friend-shoring policy, American companies are considering investing in India as it is shaping up as a robust alternative destination for manufacturing.

India beckons

So why India and not any other country, some would ask? Well, for the unversed, India demonstrates an assortment of strengths that underpin its potential to be a global economic and manufacturing powerhouse. India is heading to be the third-largest economy overtaking Japan and Germany by 2030, as per the S&P Global Market Intelligence report.

Manufacturing is slated to play an enabling role in this important journey. Sunrise sectors, especially, Renewables, Green Hydrogen, Artificial Intelligence, Agro-processing, Fintech, Microprocessors, and many others will also be contributing significantly.

Other factors like a large and growing market, a rising middle class with buying power, and capex spending by the Government on infrastructure, logistics, agriculture, skilling, and energy development are encouraging for industries looking to manufacture from India.

Machine tool industry to thrive

In this period of manufacturing growth, it is a natural possibility that the evolution of the Indian Machine Tool industry will be robust. Although the growth of the Machine Tool industry hitherto had been largely dependent on the Auto sector, which shall continue for some time in the future, the opportunity to contribute to other emerging sectors is also a possibility that will continue to grow and cater to India’s growth story.

The Auto sector will remain a major customer for the Machine Tool industry with a market size that is expected to grow from its current INR 5.6 lakh crore (US$ 67 B) to INR 16.7 lakh crore (US$ 201 B) by 2026. Looking beyond this, there are immense prospects from other sectors that are promising. The market size looks encouraging for sectors like Defence (INR 1.73 lakh crore [US$ 21 B] by 2025), Electronics Manufacturing (INR 2.5 lakh crore [US$ 30 B] by 2026), Medical Devices (INR 4 lakh crore [US$ 48 B] by 2026), Toys (INR 0.25 lakh crore [US$ 3 B] by 2028), and Furniture (INR 2.7 lakh crore [US$ 33 B] by 2026). (Source: Invest India/IBEF).

The Capital Goods sector, with its 10 sub-sectors, will grow significantly by 2025. Likewise, Railways, with high-speed trains, infrastructure with the National Master Plan, and productivity-linked incentive (PLI) schemes, will trigger demand.

The domestic market share of machine tools is around 45-50 percent, which opens room for foreign firms to consider investments in India and cater to the untapped market share.

Considering India’s potential in manufacturing, it is the best time for foreign investors to continue their investments in sunrise sectors and support the industry including the Machine Tool and Ancillary industries.

IMTMA holds the flame

Indian Machine Tool Manufacturers’ Association (IMTMA) has always been at the forefront when it comes to finding opportunities for manufacturing growth. The Association organizes technology missions for CEOs and senior executives of member organizations to visit reputed machine tool and manufacturing technology exhibitions and understand the latest advancements and best practices. IMTMA also organizes the ‘India Opportunities’ sessions, jointly with international associations which bring together exhibitors and visitors to connect and discuss business opportunities in the Indian market.

The International Manufacturing Technology Show (IMTS 2024) in Chicago from September 9 - 14, 2024, is an opportunity for the designers, builders, sellers, and drivers of manufacturing technology from India and the US to connect, be inspired, and find solutions.

India looks up to America for cutting-edge technology while America can rely on India for making advanced machines and breakthrough innovations. Jointly the two countries can work to build energy-efficient lightweight green products and processes, using industrial collaboration and possibly leveraging the strength of startups. Breakthrough technologies in the machine tool and manufacturing arena can be explored further.

IMTMA can support American companies to explore possibilities in R&D, innovation, and the overall manufacturing process in India. It can also aid in exploring partnerships and joint ventures with its member companies which can enable collaborative work.

As trade between the two countries deepens further, India could be a reliable partner for America to source machine tools for Asian countries, the Middle East, and Northern America regions. Precision machine tool building and precision component manufacturing can create big opportunities for Indo-American partnerships with a ceaseless supply of trained technical manpower from India. It will be a win-win situation for both Indians and Americans.

Source: IMTMA