Empowering MSMEs for Global Competitiveness

The MSME sector is pivotal in increasing the manufacturing share of India's GDP from the current 17% to the targeted 25%. The sector seeks research grants, greater access to low-cost finance, lower thresholds and conditions for incentives, and extended timelines for domestic value addition. These measures are envisioned to cultivate domestic champions who can represent India’s manufacturing ecosystem in the global supply chain.

Mega Industrial Parks: A Game-Changer for India

The establishment of large industrial parks has been a successful international model for cluster-based manufacturing, enabling cost-sharing of advanced facilities and providing a one-stop sourcing hub for buyers. With this in mind, global entities are observing India's potential to emulate such a model, which could serve as a more compelling incentive for them to establish operations in India.

Fostering Design-Led Manufacturing

To climb the value chain and achieve targeted exports of US$ 1 trillion by 2027-28, the sector urges policies that promote the development of new technologies and creation of Intellectual Property within India. Restoring higher income tax deductions for Research and Development expenditure, setting up research centers for indigenous technology, providing access to advanced resources at concessional charge, and encouraging public-private collaboration are some of the proposed measures to foster a robust, technology-driven environment.

Expanding PLI Schemes for Comprehensive Growth

The Production-Linked Incentive (PLI) Scheme has proven to be a catalyst for growth across various sectors. As we approach the upcoming budget, it is crucial to extend this momentum to the manufacturing of sub-assemblies and components. Reduction in customs duties on raw materials, which are essential for the production of these components and sub-assemblies can be a good start.

The industry's expectations is in addition to the financial incentives, the budget should also craft an ecosystem that encourages innovation, sustainability, and global competitiveness. With the budget set to be unveiled on February 1, 2025, there is a high sense of anticipation among industry stakeholders. The policies and measures introduced will be critical in shaping India's manufacturing landscape and economic trajectory, potentially cementing its status as a global manufacturing hub.