FICCI President Anish Shah, who assumed office on Monday, envisions India’s manufacturing sector transforming into a global powerhouse in the next five years, aligning with the country’s goal of reaching a $30 trillion GDP by 2047. 

Emphasising that India can be a manufacturing hub for the world, Shah highlighted the sector’s recent robust growth, citing a record 13 per cent y-o-y increase in second-quarter GDP numbers. 

“India can become manufacturing hub for the world and that is going to drive manufacturing growth faster. I do expect manufacturing growth to sustain and grow faster than rest of economy over next five years”, Shah told businessline in an interview, his first after assuming charge as FICCI President.

To achieve the target of raising manufacturing’s GDP share from 16-17 per cent to 25 per cent by 2047, Shah emphasised a necessary 15X growth in the sector. He underscored his presidency’s theme of “financial inclusion” with a focus on ‘Make in India’ (which will propel manufacturing), women-led development, farm prosperity and sustainability as crucial pillars propelling India’s economic growth to 8-9 per cent in the coming years. 

Shah highlighted the “China plus 1” approach of multinational companies and the emergence of Indian firms producing world-class products across various sectors, anticipating a significant uptick in foreign capital inflows driven by innovations like Infrastructure Investment Trusts (InVITs) and supply chain diversification strategies. 

He anticipated a surge in private sector investments alongside government Capex, especially in sectors like automobiles and hospitality, as India’s economy grows. 

Shah stressed the need for increased Research and Development (R&D) spending by Corporate India, citing instances like Mahindra’s success in developing top-notch SUVs through domestic R&D, asserting that superior R&D capabilities can position India as a global leader in manufacturing.

R&D is an important element where industry has to do well. Industry has to put in R&D to create world class products to be able to win in India and then win around the world as well, Shah noted.

“That comes to Make in India for the World approach. If we do all of that, we can create the momentum to be able to create leadership for India”, he said.

“We need more R&D. Certain sectors are doing it. We have created XUV700 and Scorpio and Thar in India. They are beating everyone in the world. We are doing that with R&D in India”.

Indian players are beating overseas players with much lower R&D spend. “That is not to say that our R&D is less than what others have done. It is better than what others have done. Take the example of ISRO. ISRO has delivered a lot more with much lower R&D spend than what others have done”, he said.

Private capex to bloom

With strong demand creation and growth in the economy, Shah said that he expects private sector investments to come back in a significant way over the medium term. “Of course, there may be a lag with the government’s current Capex push. However I do see private sector investing at a higher pace as well in coming days”, he said.

“I am confident that private capex will bloom as demand is strong and the economy is progressing at a good pace. The private sector will look to fulfil demand and will have to put capacity”, he added.

Electric Vehicles

On the aspect of growing popularity of electric vehicles (EVs), Shah said that the EV side is going to grow and “We are ready for it”. By 2027, Mahindra should get 30 per cent EV penetration. “By 2030, we hope to make a million EVs for India and the world (Mahindra SUVs)”, he said when asked about Mahindra Group’s business plans.

The inflexion point is going to be when charging time comes down. At 30-45 minutes, it will still be not enough to charge cars fast enough and that has to come down to ten minutes for the industry to take off. “Once it comes to that level then we will see electric take off much faster”, he said.