Industrial Automation: A Vital Ingredient for ‘a Developed India’ Dream

Industrial Automation: A Vital Ingredient for ‘a Developed India’ Dream

As we all know, manufacturing plays a vital role in the development of a nation. India wants to be a developed nation by 2047, a hundred years after Independence. It will soon become the third largest growing economy.7 Manufacturing must become a cornerstone of India’s economic growth. As of now, the Indian manufacturing industry generates roughly 17 per cent of India’s gross domestic product (GDP), with it targeted to reach approximately 25 per cent by the end of 2025.8

The Indian manufacturing sector is steadily moving towards more automated and process-driven manufacturing, which is projected to improve efficiency and enhance productivity. To boost productivity, efficiency and global competitiveness, state-of-the-art automation is a must in conventional manufacturing industries such as automotives, engineering, energy and chemicals, pharmaceuticals and consumer durables. But it also needs to be incorporated as an integral part of new industries such as e-commerce, giga-factories, electronics and semiconductors and green fuels such as sustainable aviation fuel, compressed biogas, green hydrogen and so on. What got us here will not take us to the desired destination. Indian businesses will need to compete in global markets. Digital transformation with modern automation is a key aspect in gaining an edge in this highly competitive marketplace.

India must develop the capacity to export goods worth US$1 trillion by 2030. To get on this road to becoming a major global manufacturing hub, embracing industrial automation is imperative. India must continue to develop its physical and digital infrastructure to raise the share of the manufacturing sector in the country’s economy and work hard to establish itself as an important link in global supply chains. A globally competitive manufacturing sector is India’s greatest potential to drive economic growth and job creation in this decade.

Several factors contribute to this potential. A few of these favourable factors are availability of power/energy, long-term employment prospects and basic skills that can be honed further combined with a growing domestic market. This gives India a significant opportunity to engage in international markets. However, to convert that opportunity into reality, a few things must happen such as expanding exports from India (global scale and quality manufacturing), aggressively localising imports (‘Make in India’), encouraging internal demand (fiscal and monetary policies) and contract manufacturing (taking advantage of the ‘China+’ movement).

With digital transformation being a crucial component in achieving an advantage in this fiercely competitive industry, technology has sparked creativity. The manufacturing sector in India is gradually shifting to more automated and process-driven manufacturing, which is expected to increase the efficiency and boost production of the manufacturing industry. Indian businesses are gradually adopting Industry 4.0 through the Government of India’s initiatives like the National Manufacturing Policy. This will enable the government to achieve its target to increase the share of manufacturing in the GDP of the nation from 14–16 per cent in financial year 2024–25 to 17–18 per cent by financial year 2026–27 and move towards the aspirational goal of 25 per cent eventually.9

The financial incentives provided by the Indian government under the Production Linked Incentives (PLI) scheme for manufacturing businesses is also expected to help the manufacturing sector in modernising its production facilities to be at par with global manufacturing standards. Furthermore, the Indian government has announced incentives of up to ₹18,000 crore (approximately US$2.2 billion) to boost local manufacturing in sectors such as auto components, automobiles, chemicals, electronics and medical devices, to mention a few.10

This is not just about boosting the manufacturing sector but also about creating much-needed jobs for the youth of the nation. One good example of such a success story is the manufacturing of smartphones in India. The smart mobile phone manufacturing industry anticipates creating up to 250,000 direct and indirect jobs at a steady rate, driven by government incentives and increased global demand.11 Major players are expanding their workforce to meet growing production needs. This model needs to be repeated in several other manufacturing sectors.

Automation has a significant role to play here to enable job growth as manufacturing facilities grow. To begin with, it can help bridge the gap between a new inexperienced worker and a seasoned worker with more than twenty years of experience. Automation can equip a raw worker to perform closer to the level of expertise expected and help train a new batch of recruits. New-age automation can enable manufacturing businesses to skill people differently, using systems aided by AI/machine learning for higher throughput and productivity while helping to achieve world-class quality at affordable costs. Additionally, smart automation can substantially improve employees’ workplace safety.

The benefits are many, and the good news is that it will create jobs for the new-generation workers and, in parallel, drive India’s ambition to be a developed nation.