New Delhi: In the year 2024, India’s domestic manufacturing sector is set to receive stronger external support in the upcoming months as investment in the sector to rise.
According to the monthly economic review by the Ministry of Finance, a growing number of organizations in the US and Europe are focusing on reindustrialization. These organizations are primarily aiming to enhance supply chain resilience, a strategy that could significantly benefit India’s manufacturing firms as part of the China Plus One strategy.
The monthly review also highlights that both the industrial and service sectors of the Indian economy are performing well, driven by robust domestic demand and supported by tentative external demand. This positive trend is expected to continue as global economic conditions improve.
The Ministry of Finance monthly review says that the approach of western economies involves diversifying supply chains to reduce dependence on China by incorporating other countries, with India being a prime candidate for such diversification.
India’s modestly improved economic activity and consumer sentiment in Europe and a steady US economy have increased India’s exports in April. According to the Ministry of commerce data, India’s exports, including merchandise and services, increased from USD 60.40 billion to USD 64.56 billion (Y-o-Y) in April.
The EXIM Bank of India has forecasted that merchandise exports will achieve double-digit growth in the first quarter of FY25, further signalling strong prospects for India’s manufacturing sector. This optimistic outlook is fueled by increased investments and the strategic shifts in global supply chains favoring India.
As global economies seek to stabilize and grow, India’s manufacturing sector stands to gain from these developments, leveraging both domestic strengths and enhanced external support.
India’s smartphone market shipped 34 million smartphone units in the first quarter of 2024. It also registered a 11.5 per cent growth YoY (year-over-year), making it the third consecutive quarter of growth in shipments, as per the Worldwide Quarterly Mobile Phone Tracker by International Data Corporation.
The Defence exports of India have also touched a record Rs 21,083 crore in the Financial Year (FY) 2023-24, a growth of 32.5 per cent over the last fiscal when the figure was Rs 15,920 crore.
Recently Finance Minister Nirmala Sitharaman also asked for a greater push to the manufacturing sector.
Sitharaman said many suggest India has a bigger opportunity in services but we can’t ignore manufacturing and it must be pushed with greater investment and help from government policies.
“Manufacturing must increase, India must also increase manufacturing with the help of policies, its share in manufacturing in global value chains. So we need to have greater sophistication in our product manufacturing and we also need to see how this can be given the best policy support” said the minister.