Find Industry and Manufacturing expertise in India

Manufacturing contributes 16% of India’s GDP (2012). India is one of the world’s leading producers of textiles, plastics, pharmaceuticals, computer software and steel. India’s manufacturing industry employs approximately 12% of the country’s workforce. India ranks 134 in the World Bank Ease of Doing Business report, a ranking based on how conducive the regulatory environment is to the opening and operation of a local firm.

It has among the lowest labour costs in the world which, along with its stable political, social and economic environment, has made it an attractive investment destination. Many multinational manufacturers have established a base in India including LG, Hyundai, GM, GE, Ford, Electrolux, GlaxoSmithKline, Dow Chemicals, Toyota, Sony and Honda. Home-grown companies or companies that have some origin in the country include Reliance Industries (conglomerate), Tata (conglomerate), SAIL (steel, state-owned), Dr. Reddy’s Laboratories (pharmaceuticals) and Ranbaxy (pharmaceuticals). Since 2005, India’s manufacturing sector has moved away from public sector dominance toward smaller private enterprise with international interests, making India the world’s second-most prolific producer of textiles, basic metals, general machinery and equipment, electrical machinery, chemical products and pharmaceuticals.

The nature of India’s manufactured exports has also changed since 2005. Whilst products such as textiles and jewellery still account for a high proportion of Indian exports, the sector now includes manufactured goods for the engineering and chemical markets, with engineering products accounting for a peak of 40.4% of all exported products in 2011, and chemical and related products accounting for 17.2% in the same year. Overall, total manufactured exports in 2011 were up to USD168 billion from USD115.2 billion in 2010, and manufactured exports grew by 19.6% as a whole between 2003 and 2011(India Brand Equity Foundation 2012).

Manufactured goods exported from India are mainly set for the United States and Western Europe, where Germany and the UK are the predominant markets. The Middle East is also a key destination for manufactured jewellery, chemicals and engineering goods.

India ranks 16 in the 2013 Global Manufacturing Competitiveness Index, putting it ahead of major developed and emerging economies like South Korea, China and Japan. The Global Competitiveness report gives India an overall ranking of 59 out of 144 countries included in the report, with product process sophistication rating of 4.1 out of 7.0.

The Government of India’s Ministry of Commerce is the main agency that governs matters of the manufacturing industry in the country. Within the Ministry, the Department of Industrial Policy and Promotion is tasked with overseeing manufacturing policy having been merged with the Department of Industrial Development in 2000.