New Delhi . In the upcoming budget too, the government's focus will be on increasing manufacturing. However, the big question is what steps will be taken to create its entire ecosystem. Currently, we are standing at a stage where manufacturing depends a lot on imports. It will be interesting to see what steps are taken in this budget towards self-reliant manufacturing, because only then will its real benefits be achieved.

Recently, Shubhra, trade advisor to the textile ministry, told entrepreneurs at a program that they should invest heavily to increase their production capacity so that global brands can trust India for purchasing goods. She said that the global perception about the Indian manufacturing ecosystem needs to be changed. Entrepreneurs also agree that there is no comprehensive manufacturing ecosystem right now and that is why imports are increasing and the contribution of manufacturing to GDP has been between 13% and 15% for the last 15 years.

Manufacturing speed affected due to lack of ecosystem

Despite all the efforts for the last four years, manufacturing is not picking up pace due to lack of ecosystem. However, even when the country's growth rate remains high, imports increase. In the last financial year 2023-24, the export of goods was $ 437 billion while the import was $ 677 billion. In 2022-23, the export of goods was $ 451 billion while the import was $ 715 billion.
Rules for setting up a unit should be simplified. Exporter Sharad Kumar Saraf says that 12 years ago he set up a steel lid manufacturing unit in Nanjing, China and in just seven days everything from availability of land to opening of bank account was done there. Even today the unit is running and there is no need to even go there. Similar simplification of rules will have to be done for setting up a unit in India. Land availability is the biggest challenge in India. The work of creating a land bank for entrepreneurs was also started by the Industry Department, but its benefits do not seem to be visible.

Just making the main product will not work

Jay Sahai Entrepreneurs say that in India, clusters for specific products have not been developed anywhere except Tirupur. Tirupur has facilities like dyeing, knitting, weaving, stitching for textile manufacturing along with the entire supply chain (from ordering goods to sending finished goods). Ajay Sahai, CEO and Director General of Federation of Indian Export Organisations (FIO) says that just making the main product will not work. We have brought schemes like PLI to encourage the production of main products, but imports will increase if the supply chain of parts and other items related to them is not ensured at the domestic level. These days, America is increasing the duty on the product imported from China and this is an opportunity for India. However, its benefits will be available only when there is a facility for large-scale production at the cluster level.

Labor laws are a hindrance in the way of big investments

Complex labour laws are also a hindrance in the way of big investments. There is no freedom to hire and fire workers as per the need. Entrepreneurs said that the labour department inspectors even charge them convenience fee. For the last five years, efforts are being made to implement the labour code, but it has not been implemented.

Production could start only in electronics and pharma

The government has been running the PLI scheme for 14 sectors for four years, but full production has started only in two sectors, electronics and pharma. Most of the raw material related to the electronics sector is imported and it is assembled here after value addition.

Reducing manufacturing cost is a big challenge According to industrial organizations, multinational companies do not want to invest just for the Indian market. They will invest here only if they get an export opportunity. This will be possible only when India's manufacturing cost will be reduced.