Mains Practice Questions

Introduction

India’s manufacturing sector is undergoing a transformation, driven by technological advancements and innovation. Policies like Make in India and the Production-Linked Incentive (PLI) scheme have spurred investment in automation, artificial intelligence (AI).

• With the advent of Industry 4.0, India must accelerate its adoption of digital technologies to boost productivity, global competitiveness, and economic growth.

Body

Role of Technology and Innovation in India’s Manufacturing Transformation:

• Digitalization and Smart Manufacturing
  • The adoption of AI, IoT, big data, and cloud computing is enhancing efficiency, reducing downtime, and improving predictive maintenance in industries.
    • Example: The National Quantum Mission and semiconductor fabrication initiatives (e.g., Micron’s plant in Dholera) are driving high-tech manufacturing.
• Infrastructure Development and Logistics Optimization
  • The Gati Shakti National Master Plan integrates road, rail, air, and port connectivity, improving supply chain efficiency.
    • Dedicated Freight Corridors (DFC) and PM MITRA Textile Parks are fostering industrial cluster growth.
    • The ₹11.21 lakh crore allocation in Budget 2025-26 strengthens infrastructure development.
• Green and Sustainable Manufacturing
  • India is transitioning towards sustainable production with initiatives like the National Green Hydrogen Mission and FAME II (electric mobility incentives).
    • Target: 50% of energy from non-fossil fuels by 2030 and 5 MMT of green hydrogen annually.
• Global Integration and Supply Chain Realignment
  • The China+1 strategy is encouraging global companies like Apple, Tesla, and Samsung to expand Indian production facilities.
    • India’s iPhone exports surged to $5 billion in FY23, showcasing India’s emergence as an alternative manufacturing hub.

Challenges Hindering India’s Transition to Industry 4.0:

• High Logistics & Supply Chain Costs: India’s logistics costs (14-18% of GDP) exceed the global benchmark (8%), reducing export competitiveness.
• Skill Gaps & Labor Market Rigidities: With 90% of the workforce in the unorganized sector, adapting to AI-driven production remains challenging.
• Weak MSME Ecosystem & Credit Constraints: Only 20% of MSMEs have formal credit access, limiting innovation.
  • Low R&D investment (0.65% of GDP vs. 2.4% in China) hampers high-tech manufacturing.
• Import Dependence for Critical Components: India imports 70% of APIs and semiconductor components from China, creating supply chain risks.
  • Semiconductor imports surged 18.5% to ₹1.71 lakh crore in 2023-24.

Strategies for Industry 4.0 Readiness

• Enhancing Logistics and Supply Chain Efficiency
  • Fast-track Gati Shakti Master Plan to optimize multi-modal transportation and reduce transit delays.
  • Strengthen port modernization and inland waterways for global trade competitiveness.
• Skilling Workforce for Industry 4.0
  • Expand Skill India and PMKVY programs with a focus on AI, robotics, IoT, and semiconductors.
  • Foster industry-academia collaboration to bridge the skill gap.
• Strengthening MSME Ecosystem and R&D Investment
  • Expand ECLGS (Emergency Credit Line Guarantee Scheme) to improve MSME liquidity.
  • Establish technology hubs for MSMEs to facilitate access to automation and AI.
• Boosting Domestic Manufacturing and Reducing Import Dependence
  • Scale up Semicon India Program (₹76,000 crore) to establish chip fabrication facilities.
  • Develop special economic zones (SEZs) for electronic components to encourage local manufacturing.
• Expanding Global Trade Partnerships and Market Access
  • Finalize pending Free Trade Agreements (FTAs) with the EU, UK, and Canada to improve export competitiveness.
  • Enhance participation in global value chains (GVCs) by integrating MSMEs with multinational supply networks.

Conclusion

India stands at the cusp of a manufacturing revolution driven by technology, innovation, and policy support. By leveraging digital transformation, sustainable manufacturing, and global partnerships, India can establish itself as a global leader in advanced manufacturing and achieve its Viksit Bharat @ 2047 vision.