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India’s Advanced Manufacturing Sector

The Indian manufacturing industry generated 16-17 percent of India’s GDP pre-pandemic and is projected to be one of the fastest growing sectors. The machine tool industry was literally the nuts and bolts of the manufacturing industry in India. Today, technology has stimulated innovation with digital transformation a key aspect in gaining an edge in this highly competitive market.

In the sphere of manufacturing, India has traditionally been focused on domestic production and consumption. Challenges included a price conscious market, underdeveloped infrastructure and supply chains, and a leaning towards labor intensive processes owing to the availability of low-cost labor and technology being expensive.

Both the Government of India and Indian companies recognize the need to move forward to the next and latest phase of industry. 

  • The National Manufacturing Policy of the Government of India aims to increase the share of manufacturing in GDP to 25 percent by 2025.  
  • The “Make in India” policy of the Government of India is expected to increase the demand and consumption for machinery and equipment by the local manufacturing industry.  
  • To be implemented from 2022, the Production-linked incentive (PLI) scheme was launched by the Government of India to develop 13 sectors on par with global manufacturing standards.  

The gap in demand and supply has spurred the requirement for increased capacities and the Indian manufacturing sector is expected to offer several opportunities for investment and trade. There is also a gradual shift in the focus of Indian industry to more automated and process driven manufacturing. Companies previously dependent on labor intensive practices are now looking towards increased automation to minimize uncertainties and maximize productivity.

The need to reduce the competitive gap and to take advantage of challenges in China, India is on the path towards adopting more technology in its manufacturing processes. End-user segments, such as aerospace/defense, automotive, and information and communication technology are the source of this demand for more high-end equipment and machinery.

India is gradually progressing on the road to Industry 4.0 through the Government of India’s initiatives.

Smart Advanced Manufacturing and Rapid Transformation Hubs or SAMARTH Udyog Bharat 4.0 is one of the initiatives by the Government of India’s Ministry for Heavy Industries & Public Enterprises to enhance competitiveness in the capital goods industry. They have created demonstration centers or hubs to spread awareness about Industry 4.0 among Indian manufacturing companies. Additive manufacturing is slowly gaining traction in India but is still in the nascent stage. Associations such as the Additive Manufacturing Society of India have been formed with the objective of promoting this technology.

The following table is the top 15 product-wise exports of India. It provides an indication of the opportunities in the manufacturing sector for U.S. companies seeking to export components and other related equipment to manufacturers in India.

Source: Global Trade Atlas


Products under Harmonized System (HS) Codes 84, 85, and 90 directly relate to core manufacturing sub-sectors of machinery and tools, process controls, and automation and material handling. The table below shows the imports of India related to these three HS codes.

Source: Global Trade Atlas

The experienced U.S. Commercial Service team in India can help your market entry or expansion in the Indian subcontinent. For further information regarding this sector, please contact Commercial Advisors: Malarvizhi Parimel and Shantanu Sarkar.