At the CII Manufacturing Conclave held on 7 August 2024, at Le Meridien New Delhi, industry leaders Deepak Shetty, Anil Parab, and Deepak Jain shared insights on the critical steps needed to bolster India’s manufacturing sector and drive sustainable growth.
Embracing the future of manufacturing
Deepak Shetty, chairman, CII Council on Manufacturing Excellence and CEO and managing director, JCB India, highlighted the pivotal role of the manufacturing sector in India’s economic trajectory. He acknowledged the service sector’s contributions over the past 15-20 years but emphasized that achieving the nation’s ambitious goals for the next 25 years hinges on a robust manufacturing sector.
“We have to admit that in the last 15-20 years, the growth we have seen has been driven by the services sector,” Shetty said. “As we stand on the cusp of the next 25 years and our journey towards a Viksit Bharat, it’s clear that our goals and targets can only be achieved if the manufacturing sector rises to the challenge and performs in line with the service sector.”
Shetty highlighted the importance of valuing talent within the manufacturing sector to retain skilled professionals who might otherwise migrate to the IT sector. He suggested that industries need to offer competitive compensation and clear career paths. “Within our organization, we have set a challenge that 80% of our recruitment must come from within,” Shetty shared. “Gone are the days of concealing job openings; today, we openly advertise every position, inviting applications from across India and around the globe.”
Shetty also pointed out the necessity of focusing on digital disruption, sustainability, and customer experience innovation in manufacturing processes. He highlighted the transformative potential of AI in predictive maintenance and resource optimization.
Moving forward, Shetty recommended focusing on infrastructure investment, noting that while the government has made strides, significant improvements in logistics are essential to reduce costs and enhance competitiveness. He emphasized the need for increased promotion of export-oriented manufacturing, arguing that a global market presence is crucial for growth. Additionally, he advocated for innovation not just in product development but also in manufacturing processes, urging the sector to develop proprietary solutions and patents. Finally, Shetty stressed the importance of aligning with global sustainability expectations, particularly in light of European carbon taxes and ESG goals.
Reconfiguration of globalization
Anil Parab, whole-time director and senior executive vice president, Larsen & Toubro (Heavy Engineering and L&T Valves), addressed the evolving landscape of globalization post-pandemic, noting that countries are increasingly prioritizing self-reliance, leading to a reconfiguration rather than a retreat from globalization. “Post-pandemic, nearly every country is emphasizing self-reliance,” Parab observed. “It is not a complete shift away from globalization, but it is certainly being reconfigured.”
Parab highlighted India’s strengths in resilience, sustainability, and innovation, asserting that these qualities are now crucial in the global supply chain. He also pointed to the role of free trade agreements in accelerating changes in global value chains.
Pillars for growth – the VIKSIT framework
Deepak Jain, co-chairman, CII Council on Manufacturing Excellence and CEO and managing director, Lumax Industries, talked about six pillars (VIKSIT) essential for manufacturing growth. These pillars are: V for Value Addition, I for Industrial and Inclusive Development, K for Knowledge and Capacity Development, S for Sustainable Supply Chains and Skill Development, I for Infrastructure Investments, and T for Technology.
Jain emphasized increasing India’s contribution to the global value chain. He said, “Value addition is crucial today. Currently, India accounts for less than 1.5% of the global value chain. If we aim to increase this to around 2.5% to 3%, it’s important that we move beyond mere assembly and manufacturing. We need to delve deeply into value creation and develop an ecosystem that emphasizes thorough localization.”
He called for large industrial parks that integrate well with local economies and facilitate competitive manufacturing. Jain stressed the importance of education and training to build a skilled workforce, drawing parallels with leading manufacturing hubs like China, Korea, Germany, and the US. He highlighted the need for sustainable practices and continuous skill upgrades to ensure long-term competitiveness. Jain also highlighted the critical role of infrastructure, including transportation, power, and digital connectivity, in supporting manufacturing growth. He advocated for embracing advanced technologies, investing in research and development, and fostering a culture of innovation.
“In summary, these six pillars – Value Addition, Industrial and Inclusive Development, Knowledge and Capacity Development, Sustainable Supply Chains and Skill Development, Infrastructure Investments, and Technology (VIKSIT) – will provide the momentum needed for India’s manufacturing sector to thrive,” Jain concluded.
