Indian manufacturing faces challenges in scaling up production. Check out if your industry also.
India’s manufacturing sector faces significant hurdles in scaling its operations across key industries like textiles and electronics. Despite being the world’s second-largest producer of cotton, India lags behind countries like Bangladesh in garment exports. With $13 billion in apparel exports in 2023 compared to Bangladesh’s $54 billion, India’s potential in labor-intensive manufacturing remains underutilized.
Key Challenges
1. Textiles Sector:
• High tariffs and lack of trade agreements hinder export competitiveness.
• Fragmented small-scale units dominate the sector, limiting scalability.
• Labor-intensive opportunities remain untapped due to insufficient incentives.
2. Electronics Sector:
• The PLI schemes prioritize capital-intensive operations, benefiting large manufacturers but not fostering job creation at scale.
• This capital focus shifts attention away from sectors like textiles, which could offer greater employment generation.
Proposed Solutions
• Revamp of PLI schemes for the textile industry, with reduced capital investment requirements to include smaller manufacturers.
• Enhanced trade agreements and subsidies to bolster exports and competitiveness.
• Policy reforms focusing on labor-intensive manufacturing, ensuring job creation aligns with India’s large workforce.
What’s in It for HR?
1. Skilling Initiatives: With reforms in focus, HR must align strategies for upskilling workers in textiles and electronics to meet evolving industry demands.
2. Workforce Planning: Companies should prepare for policy-driven growth by scaling recruitment and ensuring a pipeline of skilled labor.
3. Retention Strategies: Competitive benefits and workplace environments will be crucial as industries adapt to global standards.
Sources:
• Livemint: Indian manufacturing’s problem of scale
• Additional analysis based on World Bank insights on India’s labor force challenges.
HR Actionables: This is a wake-up call to bridge gaps between policy initiatives and HR strategies, focusing on inclusivity and preparing for labor-intensive industry transformations.
