Manufacturing in India


Manufacturing is a term of physical or chemical transformation of materials into products on large scale by using machinery or capital equipment, in production of handmade goods for personal use. Major sectors for manufacturing goods include textiles, metals, capital goods, food, leather and footwear etc. In 2013, Deloitte’s global index has ranked India the fourth most competitive country behind China, US and Germany. Good manufacturing of products and services increases 30% economic growth of a country. And we can say that manufacturing sector is the backbone of any economy.

Manufacturing can be categorized on variety of goods as follows:

Basic Goods: Coal, Electricity, Fertilizers, Cement, steel castings are examples of basic goods.

Capital Goods: Commercial, vehicles, electric motors, wagons, heavy locomotives are examples of capital goods.

Intermediate Goods: Giant tires, petroleum bolts, paints, jute and plywood are examples of Intermediate goods.

Consumer Goods: Consumer goods represent final value-added products that are distributed for consumption which are purchased for personal or family purposes. Paper, Sugar, Wheat, Soap, Phone, Tea are examples of consumer goods.

Challenges in Indian manufacturing sector

  • Manufacturing sector requires urgent attention both at macro and micro levels.
  • Improving skills of the workers
  • High cost of production
  • Poor Infrastructure
  • Raw material cost
  • Quality of production
  • Inability to build talent internally
  • Corruption and global competition

Potential of Manufacturing Sector

  • According to Deloitte manufacturing competitive report India placed 2nd in manufacturing sector.
  • This sector has great potential to employ people and increase the income levels.
  • Only this sector has the capacity to absorb large labor pool of the country.
  • In manufacturing area, India has beaten Brazil in the production of motor vehicles which is good sign for countries growth in economies.