The Future of Production in India, a report by 3one4 an early-stage venture firm suggests that there is a shift in the Indian manufacturing sectors from traditional scale-driven models to one anchored in the intellectual property, research and automation sector. This category is named “Manufacturing innovation spectrum” by 3one4. This category includes three archetypes namely- Process-driven manufacturing, IP-led manufacturing and a combination of both manufacturing under the hybrid category.
Anurag Ramdasan, a partner at 3one4 capitol stated, “There is a very fundamental shift in how these businesses are being built in India, and there is a certain maturity that has come up now. That is making this sector very approachable, and very realistic for delivering returns within the timeframe of a venture capital fund. I think in the next few years, we will see more and more capital going into this space.” This can elevate the nation's competitiveness across various fields like semiconductors, aerospace and specialty chemicals to produce innovative and high-complex goods. These industries alone contributed a growth of 35 percent of FY24's $459 billion. This is expected to grow to $1.6 trillion by FY34.
Apart from this, India is benefitting from the US tariff imposition. With Indian startups contributing immensely to the economy, the Indian tariff is cheaper compared to other countries. This combined with the rising labor productivity, infrastructure development, and increasing capital expenditure enables sustainable growth for India.
The report also highlights that compared to Mexico, Thailand, and Vietnam, in India, there have been 28 production relocations or capacity additions in recent times. This can diversify the export chains of India.
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