FM Nirmala Sitharaman Calls for Advanced Manufacturing in India

By siliconindia  |  Saturday, 18 May 2024, 08:31:13 AM IST

FM Nirmala Sitharaman Calls for Advanced Manufacturing in India
Union Finance Minister Nirmala Sitharaman emphasized that India must boost its manufacturing sector and expand its role in global value chains, leveraging government policies aimed at fostering self-reliance. Speaking at the annual business summit of industry body CII, Sitharaman noted that as India ranks highly among investment destinations for US and European companies seeking to lessen their dependence on China and shift manufacturing to emerging markets, the country needs to achieve greater sophistication in its manufacturing processes.
“So their preferences for India, 65% of nearly 760 executives surveyed (in a Capgemini Research Institute report in May) were planning to increase investments significantly in India," Sitharaman said. “Expanding manufacturing also help India be self-reliant", she added.
Over the past three decades, Western businesses have heavily invested in China due to its low labor and manufacturing costs, as well as its vast and growing consumer market, leading to a significant concentration of their business interests in the country. However, many Western companies now seek to diversify their supply chains and reduce their reliance on China by redirecting investments into manufacturing in emerging markets such as India. Sitharaman stated that India’s consumer market is expected to double by 2031, contributing 18% to global growth over the next five years.
“India Story is a compelling growth story for several reasons", Sitharaman said. “The IMF estimated that India's contribution to global growth for five years beginning 2023 will be 18%. So between 2023 and 2028, we are looking at an India which is going to be very dynamic, contributing to 18% of the global growth", she added.
The country has also evolved from its earlier twin balance sheet problems to now have a twin balance sheet advantage, with the balance sheets of both corporations and banks having turned around in recent years, the finance minister said. “The corporate sector balance sheet and the government and the financial sector (bank) balance sheet have not just turned around, they are now in the pink of health", she said.
“The vibrancy with which investments can happen, expansions can happen, the banking sector can be buoyant enough to address the credit requirements, (which) will push the economy faster (and) make sure that the big and small (companies) have credit access", Sitharaman added.
On the demographic dividend in India, Sitharaman said that over the next three decades the country will historically have the lowest dependency ratio, thus pushing net benefits more towards consumption. “India’s transition towards green energy, green economy, and sustainable future is responsibly going to be built up. It is sure to generate a new market and a global demand", she said. “The World Economic Forum has projected 50 million net new economy jobs are going to be created in India by 2030".

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