Nirmala Sitharaman Flags Need For India To Boost Manufacturing Sector, Achieve Self-Reliance

Nirmala Sitharaman, the Finance Minister of India, said on Friday, 17th May, that the nation needs to boost its manufacturing sector to achieve self-reliance and increase its share in the global value chain. She flagged the need for India to ramp up the manufacturing sector while addressing the Indian industry captains at the CII Annual Business Summit. The Finance Minister also suggested the urgency for achieving greater sophistication in policy support and product manufacturing.

The Finance Minister of India also shared her review against the advice proposed by some economists of the nation to no longer pay heed to manufacturing or boost manufacturing. She highlighted the relevance of increasing manufacturing in India with the help of policies to grow India’s share in the global value chain. 

Renowned economists like Raghuram Rajan, a former governor of RBI, have previously expressed their thoughts on why India needs to focus on the services sector instead of the manufacturing sector. He believes India has missed the opportunity to do so. According to his understanding, the manufacturing-led growth model of China cannot be replicated any longer.

The Finance Minister of India also believes that expanding the manufacturing sector in India will make the country, “Atmanirbhar.” She also stated that there is still hope for India to ramp up its manufacturing sector. According to her belief, the world post Covid looks up to the China plus one strategy. 

Recently in May, Nirmala Sitharaman, while quoting a Capgemini Research Institute, said that India leads the list of investment destination for Europe and the US senior executives. She feels that the senior executives of the United States and Europe who aspire to reduce their reliability on China can switch a part of their manufacturing capacity to emerging markets like India. 

According to a recent survey, 65 percent of nearly 760 executives claimed that they have planned to increase their investment in the manufacturing sector of India. 

Currently, the PLI of the telecom sector has enabled the country to become self-reliant. An achievement of 60 per cent of the import substitution comes from the telecom sector of India. 

Nirmala Sitharaman also added that the PLI scheme is transforming the electronics and mobile sectors. She believes this gives the Indian industry quite a big scope as well. In 2014, the dependence on imports was about 78 percent. Today, 99 percent of the mobiles that are sold in the country are made in India.

The value addition in smartphones and electronics manufacturing has also grown. It has crossed 20 percent from a negligible percent back in 2014-2015. 

The Finance Minister of India also cited an example. She shared that India has now become second largest iPhone manufacturing hub after China. India exported iPhones worth USD 1.1 billion in the last year. 

Coming the services sector, she said that her country commands 5 percent of Global Capability Centres of the world. India remains the most preferred location creating domestic and global opportunities for all. She believes the private sector will play a huge role in the development and invites partnership with them for the same.