India’s manufacturing industry is the fourth-largest among emerging economies. With products manufactured in India gaining acceptance in the world market, India’s manufacturing base is one of the fastest growing and has seen significant investments as a proportion of gross domestic product than any other country. The industry has been averaging a growth of over 9 percent in the last four years (2004-08), with a record growth rate of 12.3 per cent in 2006-07.

The Indian metals and mining sector is the major contributor to this industry. Verticals such as tools and machines, automotive, aerospace and defense, oil and gas refineries are aligned to the metals and mining industry. The growth of the manufacturing industry is indicative of the GDP growth of a country. The contribution of this industry to our GDP currently is about 17 percent. With the growing economy, the Indian SMB sector has a crucial role to play for the manufacturing domain. Of the total SMBs in India, approximately 16 percent are from the manufacturing sector. In order to sustain the growth in this sector, the government needs to review the labor law, factory act and other related regulations. Technology upgrade schemes for various sectors such as small scale industries, textiles, foods processing etc. are underway. To further encourage manufacturing growth, the Government has plans to set up Manufacturing Investment Regions (MIRs) on the lines of Petroleum and Petrochemicals Investment Regions (PCP IR).

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This manufacturing revolution has been spurred on by the increasing presence of MNCs, scaling up of operations by the domestic companies and the expanding domestic consumption due to rising incomes and increasing savings. With its abundance of engineering and technical talent, India is a potential manufacturing powerhouse for manufacturers across the world. There is significant offshoring of engineering services in the manufacturing value chain. Manufacturing operations in verticals such as automotive, aerospace, Hi-Tech, are being offshored to India and in the last two years a lot of re-engineering and product design work has been offshored. India’s excellence in sectors such as auto components, pharmaceuticals and textiles has clearly given it an impulsion. As a result India is emerging as a big market and manufacturing companies are leveraging it to create innovative products from India that are eventually gaining global significance.