Robotics

India’s industrial renaissance: Harnessing robotics & automation for manufacturing growth


India’s manufacturing industry is at a pivotal moment today. With the world’s supply chains undergoing a shift, India is perfectly positioned to become a major player, offering a strong alternative to our eastern neighbour. However, we must act swiftly to accomplish our ambitious objectives. 

The Government of India’s objective is to increase the manufacturing sector’s share to 25% of GDP, up from the current roughly 15%, as part of the Make in India initiative. To achieve this, the Economic Survey of India 2019-20 paints a compelling narrative of an export-led strategy focused on product assembly / discrete manufacturing. While this is a real and significant opportunity, it would require focusing effort on industries (within the product assembly space) where large economies of scale and vertical integration can be achieved at a war footing. Notably, the current industrial policy and fiscal incentives have been architected to achieve exactly this – 8 out of 14 sectors covered under the PLI constitute high-growth product assembly. 

These sectors have already begun to show promise. Auto component exports exceeded the 30% figure (as a percentage of industry revenue) in FY24. Similarly, we witnessed a 22.24% surge in electronics exports in FY24, breaching the $20 billion milestone three quarters into the year. 

Emerging signs of progress, evidenced by the rise in exports, credit, and tax payments for both SMEs and large enterprises in these sectors, underscore the potential. 

Building and Increasing Competitiveness

To empower our companies to compete in global markets, we need to focus on increasing ecosystem competitiveness. This will not only increase firm-level growth & profitability but also secure higher living standards for workers. Increasing competitiveness will depend on improving long-term productivity (not low wages or currency arbitrage), majorly led by digital transformation and robotic automation.

Raghav Gupta
Vice President
Endiya Partners

Notably, product assembly-based industries globally (particularly automotive and electronics) have been at the forefront of adopting robotic automation to streamline operations, improve quality, and increase productivity. This trend is starting to take hold in India as well.

The World Robotics Report 2022 highlights the correlation between the presence of large manufacturing hubs and investment in robotics. China, Japan, the US, South Korea, and Germany account for 78% of global robot installations. India showed up in the 10th spot on the list, underscoring its nascent journey. With considerable whitespace waiting to be filled, the potential for the growth of robotics in India is immense. 

Robotics for the Indian market

While Indian manufacturing is progressing towards establishing its global presence, automation solutions that are effective globally don’t pass the ROI test in India. There exists an optimal balance between fully customized solutions and generalized autonomy that is waiting to be built at a price point suitable for Indian industrial applications.

Moreover, the vision of taking manufacturing to 25% of GDP should go beyond profitability to encompass improvements in productivity, production of higher-quality goods, and the creation of highly skilled job opportunities. These are all advantages that will materialize as we devise indigenous solutions for digital transformation and robotic automation tailored to our specific requirements and ecosystem.



Source

Related Articles

Back to top button