A Comprehensive Guide to Manufacturing in India

Manufacturing presents itself with the opportunity of providing large-scale employment. This enables economic growth and thus,  the Indian government has actively adopted ‘Make in India’ as a core policy. It’s an initiative to encourage and accelerate the growth of the country’s manufacturing sector.

Table of Contents

India as a Manufacturing Hub

Today, India is the world’s ninth-largest economy and an attractive hub for foreign investments in the manufacturing sector. It has several strengths that make India a manufacturing powerhouse such as a large pool of talented engineers, a skilled labor force, and significant domestic consumption of manufactured goods. These factors make India a booming hub for the manufacturing sector.

Government Initiatives

To date, the Indian government has taken several initiatives and launched various programs to promote the growth of the manufacturing sector. Some of these initiatives are listed below: 

  • In the Union Budget 2022-23, the government allocated US$ 315 million for the promotion of Electronics and IT Hardware Manufacturing.
  • The production-linked incentive (PLI) scheme for semiconductor manufacturing is set at Rs. 760 billion. The goal of setting this PLI is to make India, one of the major producers of this particular component in the world.
  • The government approved a PLI scheme for 16 plants for key starting materials and active pharmaceutical ingredients. The total investment for the establishment of these plants is US$ 47.01 million and it is estimated to generate approximately 3,042 jobs.
  • In order to expand the smartphone assembly industry, the government of India announced funds worth US$ 1 billion in cash to each semiconductor company that establishes its own manufacturing units in the country. This was announced in March 2021. 
  • The government of India has outlined a plan in August 2021 to reach its goal of US$ 1 trillion in manufactured goods exports.
  • In July 2021, the government of India launched six technology innovation platforms to boost the manufacturing sector in India. These technologies will enable India to compete globally.
  • In July 2021, the Defence Ministry issued a tender of US$ 6.7 billion for building six conventional submarines under Project-75 India to propagate Make in India.

The above initiatives are only inclusive and not limited to the ongoing programs that are launched or initiated by the government of India. It is estimated that the manufacturing sector of India has the potential to reach US$ 1 trillion by 2025. In addition, the GST (Goods and Services Tax) implementation has made India a common market with a GDP of US$ 2.5 trillion.  

Focus on the Plastics Industry

One industry that has particularly evolved in the manufacturing segment in India is the plastics manufacturing industry. The Plastic industry has been one of the major contributors to the manufacturing industry as it applies to various sectors such as automotive, construction, medical electronics, etc. This has resulted in a subsequent evolution of injection molding in India. 

Injection molding is a common plastic manufacturing process. It is an efficient manufacturing process that can produce high volumes of identical plastic parts. It can be applied to an array of industries such as electrical, medical, automotive, construction, packaging, and more. 

tool assembly in india

The injection molding industry has risen exponentially over the past 2 decades across the globe and in India, this industry has bloomed such that India is now considered to be one of the global leaders in plastic manufacturing. In this article, we have enlisted every detail that you need to know about manufacturing in India.

Why Should You Manufacture in India?

There are 3 major perks to manufacturing in India. There are listed below: 

  • Skilled Labor resources
  • Raw material sourcing advantages
  • Great infrastructure

If you manufacture globally and are now, considering manufacturing in India, here are some advantages that you should know about: 

Advantages of Manufacturing in India

Manufacturing in India is not only a cost-effective option but is also one of the most viable options as it poses various advantages. Let’s take a look at these advantages:

1. Skilled Engineers

One of the major advantages of manufacturing in India is that you don’t have to worry about finding qualified, skillful engineers. Not only the engineers in India are skilled but they are also aptly qualified for designing and manufacturing your product.

2. Labor Cost Advantage

manufacturing india infographic

One of the major reasons for manufacturing in India is its labor cost advantage which is at par with China. Thus, manufacturing in India is a worthwhile alternative to China because of its low labor cost.

3. English Speaking Country

India, being an English-speaking country eliminates the barrier of language thus, there is no communication error while manufacturing your product. 

4. Advanced Infrastructure and Quality Equipment

Indian factories are focused on delivering high-quality products. Many companies in India that are focused on quality ensure that they use quality equipment, standard measurement tools, and machines to manufacture your products. 

5. Promising Industrial Hub

India has been an industrial center in Western Asia for approximately 200 years. Along with manufacturing, India has also proved itself to be a lead innovator thus, promising to be an impressive industrial hub. 

6. Transparency in Manufacturing

Indian companies have an inherent level of transparency when it comes to delivering and manufacturing quality products. They ensure to communicate every detail regarding your project on a regular basis.

7. Positive Business Climate

India has one of the largest democracies. Its business climate has been continuously improving which makes it a stable market for foreign investors and businesses. India today has achieved high macroeconomic stability and managed to become a technology innovation powerhouse.

Industries with Production in India

India offers the best manufacturing practices for various industries. Some of the most common industries that run their manufacturing in India are listed below: 

  • Automotive
  • Electronics
  • Aerospace
  • Medical Device
  • Consumer

The above list is only inclusive and enlists some of the major industries that choose to manufacture in India. Industries and companies that choose to manufacture in India get to leverage a skilled and motivated workforce that includes engineers, supervisors, and professionals. 

India Trade Agreements

Free Trade agreements with India offer various benefits to companies seeking to manufacture in India.

What is a Free Trade Agreement?

A Free Trade Agreement (FTA) is a type of arrangement between countries to remove trade barriers. FTAs primarily facilitate trade between countries. FTAs are synergistically beneficial as they provide various benefits to companies seeking to manufacture in foreign countries. 

FTA agreements deal with the determination of the tariffs and duties that are imposed by the countries on imports thereby reducing trade barriers. FTA eases the exchange of goods and services across international borders with limited or no government tariffs, quotas, or subsidies.

Trade agreements could be bilateral, plurilateral, or multilateral. 

  • Bilateral trade agreements are regarded as treaties between two countries. The objective here is often to reduce trade restrictions to expand business opportunities.  
  • Plurilateral agreements occur when many countries decide to reduce trade restrictions. 
  • Multilateral trade agreements set global trade rules and it usually covers a large number of countries.

India Free Trade Agreement?

Currently, India is part of 12 free trade agreements. These FTAs are listed below: 

trade agreement india
Image source: unsplash.com
  • Indo-Srilanka Free Trade Agreement: ISFTA entered into force with effect from 1 st March 2000 and is a trade agreement between India and Srilanka. 
  • South Asian Free Trade Area (SAFTA): SAFTA is the free trade arrangement of SAARC i.e. the South Asian Association for Regional Cooperation.  This agreement is between India, Afghanistan, Bangladesh, Bhutan, Maldives, Nepal, Pakistan, and Sri Lanka.
  • India – Bhutan Agreement on Trade Commerce and Transit: This agreement is between India and Bhutan. The latest agreement between the 2 countries was signed on 12 November 2016 and it came into effect on 29 July 2017, for a period of 10 years.
  • India Thailand Early Harvest Scheme (EHS): The EHS for Framework Agreement for establishing a Free Trade Area between the Government of India and Thailand was signed on October 9, 2003. It was implemented on 1 September 2004. 
  • India–Singapore Comprehensive Economic Cooperation Agreement(CECA): The India–Singapore Comprehensive Economic Cooperation Agreement, also known as the Comprehensive Economic Cooperation Agreement or simply CECA, is a free trade agreement between Singapore and India to strengthen bilateral trade. 
  • ASEAN–India Free Trade Area (AIFTA): AIFTA is a free trade agreement among ten member states of the ASEAN (Association of Southeast Asian Nations) and India. 
  • India Korea Comprehensive Economic Partnership Agreement (IKCEPA): IKCEPA is a free trade agreement between India and South Korea. It is a comprehensive agreement that covers goods, services, investments, etc.
  • India Japan Comprehensive Economic Partnership Agreement (IJCEPA): The Comprehensive Economic Partnership Agreement (CEPA) between India and Japan was signed on 16th February 2011 and is a trade agreement for goods outcome and other areas of services, investment, government procurement, etc. 
  • India-Malaysia Comprehensive Economic Cooperation Agreement (IMCECA): This agreement was signed on 18 February 2011 and came into effect on 1 July 2011.
  • India Nepal Treaty of Trade: This is a comprehensive agreement on goods that provides broad market access to Nepal’s export to India. The agreement was signed on 27 October 2009 and is currently extended till 26 October 2023.
  • Asia Pacific Trade Agreement (APTA): Asia Pacific Trade Agreement (APTA) is a preferential regional trade agreement and its current members are Bangladesh, China, India, South Korea, Lao, and Sri Lanka.

How can you get in contact with Indian Manufacturing Companies?

  • Google – Google is one of the best information sources to search for injection molders and mold makers in India. 
  • Indiamart– Indiamart connects buyers and suppliers within the industry. Indiamart is an excellent database, where you can search for suppliers all across India. 
  • Trade India: Trade India is another medium that connects buyers with  suppliers. 
ExportersIndia: Another way to search for Indian manufacturers is by searching them over here. You can submit your query and expect a quick quote from the supplier within 24 hours. 

Consider Manufacturing in Pune

Pune is often referred to as the Oxford of the East as it is home to some of the most renowned education and research facilities. In addition to these, Pune has also become home to some of the most world-class manufacturing facilities. 

Manufacturing facilities of some of the largest global companies are located in and operating from Pune. Pune caters to both domestic and export market requirements thus, it has attained a global manufacturing hub status. Let’s take a deeper look at some of the advantages that Pune offers: 

Easy to travel to

Pune, Maharashtra’s second-largest city is located very proximally to India’s financial capital, Mumbai. It is approximately 94 miles / 150 kilometers away from Mumbai. Transportation here is easily available and if you choose to travel via road, you can reach Pune within 3 hours.

Pune is on the ‘Smart City’ Program

The Union ministry of Urban Development has chosen Pune to be developed as a smart city. Under this program, the city is fitted with smart solutions such as basic infrastructure, assured water and power supply, proper waste management, and an efficient public transport system. In addition, there is a system of e-Governance to improve the overall quality of life.

‘An Auto-city’/’Detroit of India’

Pune has earned yet another nickname due to the large number of greenfield facilities that are set up near the city by companies such as Tata Motors. It is generally referred to as the ‘Detroit of India’ or the ‘auto-city’. 

In addition, the Automotive Research Association of India is also based in Pune. This body is responsible for the certification of all vehicles available in India. 

Pune, a Manufacturing Hub

Pune is known to be also one of the major industrial hubs of India. The industrial township of Pimpri-Chinchwad is located just north of Pune city. It’s a major manufacturing hub and it houses over 4000 manufacturing units. 

Pune has some of  India’s largest manufacturers and exporters of pumps such as Kirloskar Brothers Limited, Kirloskar Oil Engines, Tata Motors, Thermax, KSB, Cummins, and Hindustan Antibiotics have also set up operations in the outskirts of the city. The Serum Institute of India which is the world’s fifth largest vaccine producer by volume also has its manufacturing plant in Pune. 

Pune has also attracted several foreign manufacturing firms. Pune is one of the largest hubs for German companies with over 225 established businesses. Some of these companies are  ThyssenKrupp, Foxconn, and Schindler and they have large-scale manufacturing units in Pune.

IT Hub

Pune has no dearth of IT industries. It has attracted a skilled labor pool which has created an impressive IT workforce. It is worth noting that almost all of the top IT companies in India have a presence in Pune, making it the second biggest software hub in the country, after Bangalore. Some of the largest IT companies such as Infosys, Cognizant, Wipro, Capgemini, and Tata Consultancy Services have their offices in Pune. It has become a great way of accessing IT talent for internet and software companies.

Hub to Various Industries

Pune is a hub for various industries such as automobiles, durable goods, and information technology (IT) for many Indian and foreign companies. Tata Motors was one of the first companies to set up their manufacturing facility in Pune and some of the prominent foreign manufacturers include German automakers Volkswagen and Mercedes-Benz, UK-based JCB, and US-founded GE and Cummins. 

Skilled Labor Migration

Pune is not only a major hub but also a beautiful, clean, and green city. It is an emerging metropolitan city which is why it attracts skilled labor from other cities. Not only does Pune provide a great lifestyle but it also provides employment and growth opportunities. Thus, a great labor pool makes it an excellent city for manufacturing industries. 

Closeness to Shipping Ports

harbor in india

Pune is located near India’s largest container shipping port, Nhava Sheva. This shipping port is operated by the Jawaharlal Nehru Port Trust (JNPT) and is well connected to major national highways for pan-India distribution. In addition, Pune city also has three inland container depots, which facilitate the import-export of goods and raw materials.

VEM Tooling India Manufacturing Facility

pune location in india

VEM Tooling India manufacturing facility is located in Pune, near Mumbai City. It is approximately 94 miles / 150 kilometers away from Mumbai so you can reach the facility via road within 3 hours. 

VEM India has a team size of 50 people that includes designers and engineers, with vast experience in producing custom plastic parts. 

VEM Tooling delivers great expertise in terms of mold manufacturing in India and injection molding. In addition, we currently have 10 injection machines at the Indian facility. VEM Tooling’s India manufacturing facility is an integral partner of many global manufacturers. 

You can view more details about VEM Tooling’s India facility here and also, book a tour with us if you are in town.

Molds built Inhouse

We build all of our molds inhouse. Due to over 20 years of experience in building molds, there is barely a challenge that we are not up to. In cases of very complex molds, our mold making factilities in China and Bulgaria assist with machinery and niche expertise.

3D Steel Printing in India

VEM Tooling is also introducing 3D steel printing in its facility. It is a single additive manufacturing technology and the main advantage of 3D steel printing is that plastic parts can be made without forging or machining thus, with DMLS and DMD technologies, very resistant parts can now be printed with a high-quality finish.

The primary goal of FTA is to promote business opportunities and boost the country’s GDP.  FTAs also provide various benefits to companies seeking to manufacture in foreign countries which is why it is synergistically beneficial. 

VEM Tooling India Gallery

Contact VEM for Plastic Injection Molding & Tools in India

Our plastic injection molding and tooling facility in India is dedicated to providing you with a great manufacturing experience and exemplary service. 

Don’t hesitate and contact us to learn how you can benefit from manufacturing with us in Pune.