Manufacturing Momentum: Fuelling India’s Third-Economy Leap

Swati Salgaocar, Director, Vimson Group shared her views on the Indian Manufacturing Revolution at the 20th CII Manufacturing Summit 2025. She spoke about the country’s changing industrial ecosystem and emphasized the need for scaling up manufacturing’s GDP contribution, adopting emerging technologies such as AI and IoT, and embracing sustainability as a strategic priority. She emphasizes investments in R&D and skill building for enhancing long-term competitiveness and global leadership.

India is at the crossroads of manufacturing, and the journey is not starting from scratch, but rather building from a point of strength. The future landscape looks different from what existed in the past. The nation is on track to become the world’s third-largest economy, but for this to be genuinely achieved, manufacturing has to contribute much more than it currently does. Although significant progress has been achieved, the contribution now is only about 17% of GDP. The aim is to bring this up to 25%. However, this deficit should not be seen as a deficit in itself, but as an opportunity. Moreover, the greater change is not merely in what and how much is produced, but in how manufacturing is done in the future.

Worldwide, there are three characterizing trends. First is the revolutionary effect of technologies reshaping the factory floor —AI, IoT, and automation are no longer a choice, but have become foundational. Second is that sustainability today is a competitive driver. Green manufacturing is no longer a boardroom imperative or a compliance issue; it is now a part of the business strategy. Finally, geopolitics is reshaping international supply chains, and India is becoming an increasingly serious alternative to traditional hubs. To lead, not simply follow, in this environment, swift and decisive change is needed, and technology is a core strategy. The future factory will be integrated, data-driven, and intelligent.

Empowering Industry with Automation

In 2024 alone, investments in industrial automation by Indian manufacturers crossed 30%, according to the Confederation of Indian Industry (CII). But the adoption is not even, mainly among Micro, Small, and Medium Enterprises (MSMEs), which are the backbone of the industry. Capacity building and knowledge sharing have been the focus areas through various initiatives. Still, scale and ecosystem enablement remain the principal challenge. Connectivity, cloud infrastructure, and upskilled human capital are equally essential as the technology stack itself going forward.

It is also fitting that the Western region has been the host for this summit. The region accounts for almost a quarter of India's GDP and generates 48% of the nation’s merchandise exports. Gujarat is a leading exporter of engineering goods, chemicals, and petrochemicals. Maharashtra is a leading player in the automobile, electronics, and pharma sectors. Madhya Pradesh is also coming up as a major industrial corridor, especially in textiles and minerals. Goa, while smaller in scale, has a formidable presence in pharma exports and across the region. There is also significant growth in the region’s clusters that deal with EV components, solar and wind energy systems, and semiconductor-linked electronics.

Driving Growth through Sustainability

Another key area is green manufacturing. Sustainability is no longer a choice, nor is it simply a matter of corporate reputation—it is about market access, operational effectiveness, and long-term sustainability. As witnessed in Europe and other international markets, the imposition of carbon border taxes and ESG-linked procurement standards are changing the rules, Indian manufacturers need to get in line with these changing expectations to stay relevant and competitive.

It is also crucial to bridge the enormous gap between R&D spending. India, today, is investing less than 1% of its GDP on R&D, a far smaller percentage compared to other economies of large scale manufacturing. Failing to push investments in material science, industrial design, and product innovation may lead to becoming efficient assemblers, rather than global product leaders.

A sharper talent strategy is also essential. Future-ready manufacturing requires technicians who understand the skills of the future. The Confederation of Indian Industry (CII) has been one of the most important catalysts for this change, leading several skilling initiatives in regions and sectors. These initiatives are expected to soon lead to a visible increase in workforce improvement. Finally, collaboration between new-age businesses and legacy industries is an untapped engine. The decisions taken today—technology, sustainability, investing, or partnerships will define if India just grows its industrial base or becomes a worldwide manufacturing leader.