India's manufacturers have a golden chance to emerge from the shadow of the country's services sector and seize more of the global market. McKinsey analysis finds that rising demand in India, together with the multinationals' desire to diversify their production to include low-cost plants in countries other than China, could together help India's manufacturing sector to grow sixfold by 2025, to $1 trillion, while creating up to 90 million domestic jobs.
Narendra Modi expresses his vision to make India a manufacturing hub for electronics and IT products. "In order to see a thriving manufacturing sector, we would need to make hubs where both labour and infrastructure are not a problem. We can think of innovative ways to encourage such hubs and incentives that draw big names to come to India. We will need to nurture highly trained people and give them the right environment where they can grow. Emphasis on R&D and IPR creation is also the need of the hour."
Modi adds that we have to set up skill centres in collaboration with the telecom majors that cater to the skills that are required to surge ahead in telecom manufacturing. He adds, "At the government level, we will need to ensure that we can provide seamless supply of power, water and other required infrastructure. Long and stable tax regimes are vital to attract companies, both Indian and international."