• UGI USER
  • Aug 17, 2023
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Q. In the backdrop of Atmanirbhar Bharat, discuss the core areas crucial in export promotion for India to become a manufacturing hub.

Approach:

  • Briefly explain what you understand by Atmanirbhar Bharat.
  • Discuss the areas that are crucial in export promotion for India to become a manufacturing hub.
  • Conclude on the basis of the above points.

Answer:

The ‘Atmanirbhar Bharat’ mission focuses on self-reliance in all sectors and envisions creating a production system that encourages local capacity building and indigenization.

It aims to make India a global manufacturing hub and promote export in core areas, such as:

  • Apparel, leather and footwear: These sectors provide opportunities for large-scale labour absorption and export growth and require low skill and less capital investment. Further, with China losing share in the global market for exports in these sectors due to rising production costs, it is an opportune time for India to step in.
  • Electronics: The electronics production growth increased fivefold from 2015 to 2018. This is mainly due to China losing its competitive advantage and creation of an ecosystem by the government to give a critical push to the sector. In this context, the focus should also be on integrating ‘Assemble in India’ with ‘Make in India’ to encourage assembling of products such as mobile phones, ventilators, micro digital items etc.
  • Pharmaceuticals: India contributes over 20% by value to the global pharmaceutical generics market. Further, the industry is worth approximately $37 billion, with exports accounting for about $18 billion. For instance, the prices of medicines in India are amongst the lowest in the world, which gives it a competitive edge. In addition, the ongoing COVID-19 pandemic has given a push to the sector in terms of supplying generic medicine and being the potential epicenter of vaccine manufacturing.
  • Defense: India has witnessed 700% growth in defence exports from 2016-17 to 2018-19 and it ranked 19th in the list of defence exporters in 2019. Going forward, to become a global manufacturing hub for defence equipment, India has to evolve an investor-friendly defence manufacturing policy and streamline procurement procedures.
  • Toys: India’s toy industry makes less than 1% of the world market. However, the industry has huge potential to be a major employment generator, as it is highly labour-intensive.
  • Further, India already has numerous traditional toy manufacturing hubs like Channapatna in Karnataka, Kondapalli in Andhra Pradesh, Budni-Rewa in Madhya Pradesh etc., which can be incentivised for production-linked exports.
  • Solar industry: India has the opportunity to become a global manufacturing hub in Solar Photovoltaic (PV) across the entire value chain due to its large market, expansion of solar generation capacity and several government initiatives introduced to give an impetus to the sector such as the National Solar Mission.

Despite the potential in the above-mentioned sectors, India faces several bottlenecks such as dependence on China for raw materials like Active Pharmaceutical Ingredients (APIs), and solar panels, excess labor regulations, high logistics cost, complex taxation system etc. These challenges if adequately addressed can propel the Indian manufacturing sector to become a $1 trillion industry by 2025.