Manufacturing sectors need deeper localisation, tech push: NITI report, Pg19

Key Highlights:

• NITI Aayog released a report advocating for deeper domestic value addition in key manufacturing sectors.
• The report, titled "Key Sectors to Position India as a Global Manufacturing Hub," analyzed chemicals, textiles, telecom & network equipment, and solar photovoltaic manufacturing.
• It calls for moving beyond assembly-led manufacturing to address raw-material dependence, technology gaps, and export competitiveness.
• For the chemicals sector, the report suggests improving domestic feedstock and developing integrated manufacturing clusters.
• In textiles, the focus is on Man-Made Fibres (MMF), Technical Textiles, and modernization of MSMEs.

Detailed Insights:

• The NITI Aayog report emphasizes the need for India to enhance its manufacturing capabilities by increasing domestic content and technological depth.
• The chemicals industry, valued at $200-220 billion in FY25, is expected to grow at 6-8% annually over the next five years.
• Recommendations for the chemicals sector include increasing downstream value addition to boost its global market share.
• The textile sector faces challenges as 80% of its producers are MSMEs with gaps in machinery, technology, and digital infrastructure.
• The report suggests modernizing outdated machinery and establishing cluster-level certification centers for textiles.
• It also highlights the cost disadvantage in MMF manufacturing, noting that about 35% of India's MEG requirement is imported.
• The overall strategy aims to enhance India's global manufacturing competitiveness by addressing critical supply chain and technological deficiencies.

Key Concepts Involved:

• NITI Aayog: A policy think tank of the Government of India, providing strategic and technical advice.
• Domestic Value Addition: The increase in the value of goods or services within a country's borders during production.
• Man-Made Fibres (MMF): Fibres manufactured from chemical processes, such as polyester, nylon, and rayon.
• Technical Textiles: Textile materials and products manufactured primarily for their technical performance and functional properties.
• MSMEs (Micro, Small, and Medium Enterprises): Businesses categorized by investment in plant and machinery or turnover, crucial for employment and economic growth.