Empowering India’s Manufacturing Sector: Opportunities and Strategies in Budget 2024
As anticipation builds for the Union Budget 2024, all eyes are on India’s manufacturing sector, a cornerstone of the country’s economic landscape. The recent departure of several Chinese brands has opened up new opportunities for local players, signaling a potential shift in the dynamics of the market. However, while the potential for growth is evident, competing directly remains a challenge for domestic manufacturers.
In between these challenges and opportunities, the focus now shift to nurturing growth and resilience in manufacturing sector, particularly in light of and the ongoing pursuit of the ‘Make in India’ initiative. With a strategic approach towards export-led growth, especially in the electronic manufacturing domain, the government aims to fortify the sector’s contribution to economic recovery and achieve ambitious targets set by the Ministry of Electronics and Information Technology.
The government’s vision includes making India a $300 billion powerhouse by 2025, with a significant contributed came through export activities. To realize this vision, Budget 2024 should introduce targeted measures and incentives to support export-oriented electronic manufacturing. This not only connected with overarching objectives but also capable to generate more employment, particularly for the youth, with the broader goals of the ‘Make in India’ initiative.
One avenue deserving attention is the enhancement of existing schemes like the In-bond manufacturing scheme. While providing relief to businesses and stabilizing working capital, there is room for improvement. Extending depreciation benefits on goods cleared under the scheme and providing additional incentives for compliant manufacturers can further incentivize participation.
The disruptions caused by the global pandemic have intensified the vulnerability of supply chains, particularly availability and transportation. Budget 2024 should introduce measures to strong connectivity and fortify the supply chain, ensuring resilience and efficiency while minimizing working capital requirements.
Additionally, the Production Linked Incentive (PLI) scheme, while effective, can be evolved to add sustainable growth further. Transforming it into a Design and Innovation Linked Incentive scheme would encourage investments in production capabilities and research and development, fostering a culture of innovation and enhancing competitiveness globally.
Addressing the challenge of imported electronic products is crucial for creating a level playing field.(competitive environment) Consideration should be given to increasing anti-dumping duties on these imports, promoting fair competition and supporting domestic manufacturers.
As Budget 2024 unfolds, it presents a pivotal opportunity to strategically uplift India’s manufacturing sector, contributing to economic growth and solidifying the country’s position as a manufacturing powerhouse on the global stage. Through targeted measures and incentives, the government can pave the way for a resilient and competitive manufacturing ecosystem, driving India’s journey towards self-reliance and sustainable development.
