The Make in India initiative aims to boost the contribution of the manufacturing sector from 15% to 25% of GDP, by 2022. While the market is buoyant and some changes are visible, it seems we will take much longer than anticipated to get the desired results. If and when this growth happens, there will be two factors driving it. First, the local demand and then the capex driven by FDI. In order to support this growth, India will need an ecosystem comprising tier 1, tier 2, as well as tier 3 suppliers, with a high level of automation flexibility, and quality focus. Currently, India is wooing MNCs willing to manufacture in India. However, if the local ecosystem is not ready to support these companies, they will be forced to bring their sub-companies to India. This can take away opportunities from local manufacturers. It is only through digitalisation that Indian SMEs can build the competitive edge, be on the high value chain, and take on their foreign counterparts. The factories of future or ‘smart factories’ will move from automation to autonomy, leading to greater inter-connectivity between machines, physical systems and humans in real time via Internet of Things (IoT). For SMEs to sustain and grow, both labour and productivity has to come together. The need of the hour is digitalisation across value chains, strategic partnerships, innovative funding, and turn-key solutions that can make Indian factories smarter, more productivity and highly efficient.

(Financial Express)