Innovation-Driven Manufacturing and India's Position
Global manufacturing is increasingly innovation-driven, focusing on medium-high- and high-tech products underpinned by advanced R&D, technological sophistication, and complex supply chains. High tariffs by the U.S. are likely to redefine the manufacturing sector, necessitating policies that address challenges directly.
India's Manufacturing Initiatives
- India has recognized the critical role of manufacturing post-1991 economic reforms.
- Initiatives include the National Manufacturing Competitiveness Programme (2005) and Make in India (2014).
- These have driven growth in sectors like electronics, pharmaceuticals, and automobiles.
Manufacturing Performance Indicators
- In 2023, India's per capita manufacturing value added: $0.32K; productivity: $8.9K.
- World averages are significantly higher: per capita value added: $2K; productivity: $32K.
- Total value added: India $461 billion, China $4,658 billion, U.S. $2,497 billion.
- R&D and innovation productivity: U.S. $159K, Germany $103K, Taiwan $79K, Malaysia $36K, China $21K.
Educational and Skill Development Reforms
- Need to revise student selection, labs, and skill training in engineering education.
- Entrance exams should emphasize fundamental knowledge, creativity, and problem-solving.
- Balance academic rigor with practical application; prioritize practical work (50% weightage).
- Core engineering disciplines: civil, mechanical, automobile, production, electrical, electronics, chemical, metallurgy, textiles, and biotechnology.
Infrastructure and Ecosystem for Innovation
- Creation of an industrial ecosystem akin to Silicon Valley's innovation system.
- Establish state-specific manufacturing parks with advanced facilities.
- Encourage manufacturing startups around engineering infrastructure and labs.
Policy and Investment Recommendations
- Increase R&D expenditure from 0.65% to 2% of GDP.
- Allocate an additional 1% of GDP for industrial infrastructure.
- Formulate innovative policies to adapt to the evolving global environment.
