India needs to see an increase in manufacturing contribution to the GDP, said finance minister Nirmala Sitharaman. While giving the keynote speech at the Pondicherry Literature Festival on Sunday, she said that “manufacturing has to be diversified — otherwise we will largely rely only on services — so we will give a lot of attention to it.”
Of particular attention is the electric vehicle segment which is being given “a lot of importance. We believe the future of public and personal transport will be EVs, so policy support and infrastructure support is something we are working on,” she added. The manufacturing focus is also behind govt’s push for semi-conductor investments and the various PLI schemes. “India’s demand for semi-conductors is projected to grow five-fold to around $110 billion from the current $24 billion and it is that demand for which we need to have more semi-conductor manufacturing happening in India.” The five proposals that have come to India will mean around Rs 1.5 lakh crore worth of investments “are likely to happen which are all grounded,” she said.
The investments are also linked to energy security. Reduction of duties on critical minerals will help ensure “good supply of critical minerals needed for storage battery capacity, renewable energy capacity etc,” she said. “Bharat Small Reactors will build smaller scale nuclear energy for improved energy security.”
The manufacturing focus is already showing up with electronic exports quadrupling since 2014. In 2014, it was $7.6 billion but today it is $29.1 billion which, she said, could not have happened if policy was not “an enabler”. Similarly, smartphone production has gone from Rs 1,556 crore in 2014 to Rs 1.2 lakh crore while mobile phone production has gone from 18,900 crore to 410,000 crore today.
