The Renaissance of Manufacturing Supply Chains in the Make-In-India Era

Against the backdrop of the Make-in-India initiative, India’s manufacturing sector is undergoing a transformative journey that is revitalizing its position as a significant global manufacturing hub. This transformation is characterized by profound shifts in the dynamics of its supply chain. The Make-in-India initiative is pivotal to this resurgence, cultivating an environment that nurtures domestic production, fosters innovation, and drives economic growth. Consequently, it becomes essential to explore the evolving narrative of India’s burgeoning manufacturing landscape and its far-reaching effects on the entire supply chain spectrum. This month’s cover story endeavors to accomplish precisely that objective.

India’s ascent in the global manufacturing arena has been nothing short of remarkable. Not a long time ago, a report said that exports of mobile phones were estimated to crash to zero in 2015. However, since then, the country has emerged as a pivotal player, gaining prominence for its diverse industrial base, skilled workforce, and proactive approach to economic development. As of July 2023, India’s mobile exports touched USD 8 billion, recording an average of over USD 1 billion per month of FY23-24 and growing 60% more than USD 4.97 billion registered during the same period in FY22-23.

There has been a notable surge in interest among international brands seeking to establish a presence in the Indian market. The Indian government’s initiatives, primarily the Make in India campaign, have further incentivized foreign companies to set up manufacturing units within the country. This not only aligns with global brands’ cost-efficiency strategies but also contributes to the government’s vision of transforming India into a manufacturing hub.

Tesla, the electric vehicle pioneer, has expressed interest in the Indian market, exploring opportunities for manufacturing or assembly. Tesla is all set to enter India with its manufacturing plant next year, and the negotiation for the establishment of the first manufacturing unit has reached its final leg and is likely to conclude soon.

Apple has intensified its focus on India and has also been expanding its retail footprint in major Indian cities. Experts predict that Apple is going to commission its contracted manufacturers in India for the production of iPhone 17. This historical development signifies the first time that the New Product Introduction (NPI) process for an iPhone model will be initiated outside of China.

Major international fashion retailers like Zara, Uniqlo, and H&M have been expanding their presence in India with new stores to cater to the evolving fashion choices of Indian consumers. Other global brands like Balenciaga, Shein, and Old Navy are also exploring opportunities in the Indian market through partnerships and collaborations, recognizing the potential for growth and the diverse preferences of Indian customers.

Google has made a strategic move to manufacture its Pixel 8 smartphones in India, as announced in October 2023. By manufacturing Pixel 8 in India, Google aims to enhance its presence in the country, capitalize on local production benefits, and potentially make the Pixel series more accessible to a broader Indian audience.

According to Mahindra Group Chairman Anand Mahindra, India is now remarkably close to surpassing China as the world’s leading manufacturing hub. Factors such as the neighbor’s ambitions and the disruptions in the global supply chain caused by the pandemic have played a significant role in favor of India’s growing position as a global factory.

India’s growing importance is exemplified by the nation’s increasing share in global manufacturing output and a shift towards more advanced production processes.

The Make in India initiative, launched in 2014, has been a transformative force in propelling India’s manufacturing sector from Industry 4.0 towards the evolving landscape of Industry 5.0.

Industry 4.0 laid the groundwork by introducing digitalization, automation, and data exchange into manufacturing processes. However, Industry 5.0 takes it a step further by emphasizing human-machine collaboration, integration of artificial intelligence, and a focus on sustainable and ethical practices.

“Make in India has facilitated this transition by promoting technological adoption, encouraging foreign and domestic investments in high-tech industries, and fostering an ecosystem that combines advanced manufacturing techniques with skilled human expertise,” shares Devashish Dutt (Managing Director India, WeFreight).

Krishna Khandelwal (Head of Operations, ZEISS Industrial Metrology (Carl Zeiss India)) adds, “The initiative has encouraged investments in smart manufacturing technologies, the Internet of Things (IoT), robotics, and data analytics, laying the foundation for a more connected and intelligent industrial ecosystem. The other benefits from this move towards Industry 5.0 have been to increase the global competitiveness of our companies, develop the quality standards of our MSME local vendors, upskill the workforce to make them more digitally enabled, and foster innovation & research.”

“Make in India holds an immense significance in the economic development of India by enticing domestic manufacturing companies to boost their capabilities with FDI. This movement not only helped in boosting industrial growth but also created a plethora of job opportunities and reduced reliance on Imported products,” says Dr. Pushpendra Pratap Singh (Country Head, Asia Shipping).

Putting the focus on the after-effects, Surya Kanta Dash (Vice President of Supply Chain Management – Product Business Group, Reliance Digital Retail) says “This will help our products to compete in the global market and improve our production standard too. It has also given fuel to the supply chain engine and improved visibility through the application of various innovative approaches. If this series of Industry movements continues for the next 10 years, no one can stop us from surpassing China.”

Adding to this, “Within the framework of the Make in India initiative, diverse investments in the supply chain have played a pivotal role in transforming the landscape of Indian manufacturing supply chains. A central focus has been on infrastructure development, channeling investments into transportation, logistics, and connectivity to augment the overall efficiency of the supply chain. The creation of industrial corridors and smart cities has given rise to specialized manufacturing hubs, drawing investments and fostering an environment conducive to production,” says Sanjeev Suri (Senior Vice President – Global Omnichannel Logistics and Customer Service, Amway)

Manikandan Ramachandran (Chief Operating Officer, TVS Industrial and Logistics Parks), giving the example of First Solar (Chennai-based solar PVC manufacturer) mentions, “There is a good push from the Government and this has been well received by customers as well. Our customers are taking advantage of the Make in India initiative, as well as the PLI scheme. PLIs have essentially turned out to be a boon for the manufacturing supply chains. Coupled with the China+1 sentiment, the Make in India initiative has been attracting a lot of foreign brands to set up shop in the country.”

Nikhil Puri (Vice President – Sourcing and Planning, Yokohama Tires) says, “There are many types of supply chain investments which have been driving manufacturing on the back of Make in India. In products specifically, 3D Printing is being invested in big time. Logistics is one of the big areas where a lot of investments are coming with TMS (Transport Management System), Control Towers, real-time supply chain visibility, automated or semi-automated workflows to ease the day-to-day process, and big data analytics. Blockchain is also catching up steadily.”

This is an abridged version of the Cover Story published in the February 2024 issue of the Logistics Insider magazine. To read the complete article, click here.

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