What Manufacturing SMEs Might See in Next 10 Years #Make In India

Well It is not that simple a question to answer in the present. Predicting the future has never been easy and only looking back you get to know when the entire equation changed. Make In India is one such initiative that has at least changed the way in which people saw manufacturing segment industries. Before the Indian government launched this ambitious Make in India program, not many people were serious about this segment and not many people talked about the future, past or present of this segment. Those who were connected to the segment used to think that the existing pace of growth of SMEs would continue, may be even fall.

But then comes this Make In India Program, launched by our PM Narendra Modi and the whole equation is changed forever. It focused on making India self reliant in the field of manufacturing. The strategy was kept simple and was planned in such a way that it shows it’s effects on grass-root level. The FDI caps were increased so as to allow more foreign investment and capital inflow. It was planned that establishing a manufacturing plant or an SME in general will be made easy. India was internationally projected to be a great destination to setup operations and it was stressed that those who are setting up operations here should also procure raw materials or parts & components from here only. In addition to this, the roadblocks existing in ways of SMEs whether in terms of loan approval or permissions from the government were to be nullified.

Fast forward one year. The bigger things have started showing on the surface now. There are multiple defense project undertaken in which either the products are to be built in India or a significant percentage of parts will be manufactured in India. Multiple Foreign companies are collaborating with Indian companies to setup plants and start operations here in India. The RBI is pushing the banks to lend more to SMEs. Focus is being laid upon skill development for labors in Manufacturing industry. A whole new program was launched named Startup India Standup India to encourage entrepreneurship and ease the process of starting up a venture or setting up a manufacturing plant. All these developments make us believe that the future can only be bright.

But is the picture we are imagining true? In multiple sectors, it is being predicted that the growth will be as high as 300%–500% in 10 years. The Foundry Industry, the chemicals industry, the defense and aerospace segment industries are actually spreading wings for what seems to be going to be a high flight. Renewable energy and sustainability in development is already in focus and it has given a big push to solar pane installations for energy needs in various places and also a shift to low power consuming lights. It has already given a big boost to Indian manufacturers in the electronics segment and seems to have created enough demand for a long time.

Not everything is all green. There have been certain failures also. The SMEs are still not getting loans and investment as they are prone to risks & losses. The job portal for MSMEs launched by government has been reported to be a big failure. Issues like GST are still pending. The quality of manufacturing in India is still a barrier for high precision & critical components. But still, one thing we can be sure of is that Make In India is a ground breaking program. We are right now at the verge of great developments & expansions. The next time we focus on this manufacturing segment, they will have changed much. It is basically a wave and we need to ride it to get benefited. In next 10 years, we hope that at least the GDP Share of SMEs & especially those in manufacturing segment will grow multiple times.

This was but an overview of the Topic without much data. We will be publishing a series of articles looking into different sectors in a little detail and try to predict the future through extrapolation.