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India’s Manufacturing Sector Growth: 7% in Q1 Signals Further Potential

India’s Manufacturing Sector Growth: 7% in Q1 Signals Further Potential

India’s manufacturing sector experienced solid growth of 7% in the first quarter of fiscal year 2024-25, demonstrating its continued potential as a driver of economic expansion. Despite the country’s overall GDP growth slowing to 6.7%, down from 8.2% in the same period last year, the manufacturing sector remains a key pillar of development. This growth, though down 1.9% from the previous quarter, still represents a strong performance compared to the 5% recorded in Q1 last fiscal year.
The Narendra Modi-led government has consistently prioritized the development of the manufacturing sector as part of its broader strategy to transform India into a $5 trillion economy. With initiatives such as the “Make in India” campaign and the Production Linked Incentive (PLI) scheme, the government aims to boost investment, create jobs, and increase the sector’s contribution to GDP.
Initiatives to Boost Manufacturing
India has long recognized the importance of the manufacturing sector in driving economic growth. The government’s focus on developing this sector began with cluster development in 1998 and has continued through various initiatives, including the National Manufacturing Policy in 2011, the “Make in India” campaign in 2014, and the PLI scheme launched in 2020. Most recently, the announcement of 12 industrial smart cities in August 2024 demonstrates the government’s ongoing commitment to creating a robust manufacturing ecosystem.
These efforts have attracted high-profile investments in sectors such as electronics, chip manufacturing, and battery production, although the pace of investment remains slow. Employment in the manufacturing sector saw a significant 7.5% increase in 2022-23, according to the Ministry of Statistics and Programme Implementation (MoSPI).
Future Outlook and Challenges
Despite the government’s efforts, the manufacturing sector faces significant challenges. The Colliers report projects that India’s manufacturing market could reach $1 trillion by 2025-26, though this ambitious target may be difficult to achieve given the current contribution of $0.46 trillion. Additionally, the sector’s share of India’s Gross Value Added (GVA) has declined to 14.27% in FY 2023-24, down from the government’s target of 25%.
The sector also faces volatile growth, with factors such as rising input costs, elevated freight charges, and disruptions in supply chains squeezing profitability. Domestic and foreign demand remain weak, with domestic demand growing by just 4.03% in FY 2023-24 and exports increasing by only 2.63%.
Policy Recommendations
To unlock the full potential of India’s manufacturing sector, the government must focus on stimulating demand, simplifying labor laws, rationalizing GST rates, and supporting MSMEs. The 15% tax initiative for new manufacturing companies has shown promise and should be extended, while the PLI scheme implementation needs to be streamlined to encourage more investment.
By addressing these challenges and continuing its focus on manufacturing, India can strengthen its position as a global manufacturing powerhouse and make significant strides toward becoming a $5 trillion economy.

October 3, 2024
Classification of Laboratory Chemical Imports for Traders
Classification of Laboratory Chemical Imports for Traders
Traders importing laboratory chemicals must classify these goods under appropriate chapters/headings in the Customs Tariff Act, 1975. According to the recent amendment through Notification No. 62/2024-Customs (N.T.), effective from 19th September 2024, imports of laboratory chemicals under Heading 9802 are restricted to actual users only. The chemicals must be in packaging not exceeding 500 grams or 500 milliliters. Therefore, laboratory chemicals imported for trading purposes, irrespective of quantity or packaging size, cannot be classified under Heading 9802 and should be classified under relevant sections in the Customs Tariff.
EPCG Authorisations and Recent Amendment Impact
The recent Public Notice No. 15 dated 25th July 2024, amending Para 5.15(c) of the HBP 2023, applies to EPCG authorisations issued during the 2015-20 policy period as well. As specified in the new Para 5.15(e) of the HBP, these amendments extend to past authorisations, ensuring consistency across policy periods. For EPCG authorisations issued prior to 1st April 2015, the provisions of Para 5.13(d) will apply.
Switching from CIF to Ex-Works (Ex-W) Basis: Risks and Considerations
Switching from CIF to Ex-Works (Ex-W) basis will shift several costs and risks to the buyer. In an Ex-W contract:
The seller’s obligation ends once the goods are made available at the named place and notice is given.
The buyer bears all costs related to loading, transportation, export duties, taxes, customs clearance, and ocean freight.
The buyer is responsible for marine insurance costs and any variations in insurance costs.
Any required export documents (licenses, inspection certificates, etc.) must be facilitated by the seller but at the buyer’s expense.
Delays or additional costs after taking delivery also become the buyer’s responsibility.
Thus, importing on Ex-W terms requires careful consideration of potential cost increases and the logistical challenges involved.
Closing IDPMS Entries for Import of Free Samples
Banks are increasingly reluctant to close Import Data Processing and Monitoring System (IDPMS) entries based on CA certificates for small value imports like free samples. To close such entries, you may need to provide supporting documentation such as:
Proof of free-of-cost imports, including invoices marked as free samples.
Courier or customs documentation showing no monetary transaction for the goods.
Any relevant communication with the exporter confirming the nature of the shipment.
If issues persist, consider discussing with the bank to understand their specific documentation requirements for closure of IDPMS entries related to free samples.
October 1, 2024
Amazon Great Indian Festival 2024: 8,000 Sellers Cross Rs 1 Lakh in Sales Within First 48 Hours

Amazon Great Indian Festival 2024: 8,000 Sellers Cross Rs 1 Lakh in Sales Within First 48 Hours

The Amazon Great Indian Festival 2024 kicked off with a strong start, with over 8,000 sellers surpassing Rs 1 lakh in sales within the first two days of the event, which began on September 27. Amazon reported that small and medium businesses (SMBs), including women entrepreneurs, weavers, and artisans, sold more than 1,500 units every minute during this period.
Amazon highlighted the success of sellers from tier 2 and tier 3 cities, such as Moradabad, Saharanpur, Haridwar, Bikaner, and Jodhpur, with more than 65% of sellers receiving orders from these regions. The event also helped 20,000 SMBs double their sales compared to an average day.
The company’s Amazon Business platform saw a 4.5X increase in new customer sign-ups, while bulk orders surged by 12X. Additionally, Amazon Bazaar, which focuses on non-branded and affordable products, witnessed a 50% growth in daily unit volumes.
Speaking about the event, Saurabh Srivastava, Vice President of Categories at Amazon India, said the first two days marked the best-ever opening, with a record 11 crore customer visits and a significant increase in the number of Prime members shopping.
This month-long sale coincides with Flipkart’s Big Billion Days and features a variety of products from SMB sellers who are part of Amazon’s Karigar, Saheli, Local Shops, and Launchpad programmes. The event follows Amazon’s recent reduction in selling fees, which went into effect in September.

September 30, 2024
Manufacturing Sector to Contribute 25% to India’s Economy by 2047: Piyush Goyal

Manufacturing Sector to Contribute 25% to India’s Economy by 2047: Piyush Goyal

On the 10th anniversary of the ‘Make in India’ initiative, Union Minister of Commerce and Industry Piyush Goyal emphasized the central role manufacturing will play in India’s future economic growth. Speaking on Wednesday, Goyal projected that by 2047, the manufacturing sector will contribute 25% to India’s economy.
“As we enter Amrit Kaal, India’s manufacturing base will steadily expand to meet both domestic and global demands. By 2047, manufacturing will account for a quarter of the economy. We also expect the rise of more industrial townships equipped with modern plug-and-play infrastructure,” Goyal stated in an interview with ANI.
He highlighted India’s transformation into a global manufacturing hub, crediting the collaborative efforts between public and private sectors, both within the country and internationally. “The world now views India as a key destination for manufacturing,” Goyal added.
Reflecting on the economic progress of the past decade, Goyal drew comparisons to the earlier period under previous administrations, referring to the time between 2004 to 2014 as a “lost decade.”
“From 2004 to 2014, India experienced economic stagnation. Investor confidence was eroded, corruption was rampant, and getting environmental clearances was nearly impossible during the Congress administration. The economy faltered, foreign exchange reserves and growth plummeted, the rupee depreciated, and inflation soared. Domestic investments stalled, and the overall outlook was bleak. But in 2014, PM Modi took charge, transforming the last decade into one where macro-economic fundamentals were strengthened. Initiatives like Startup India, One District One Product, and the creation of 20 new industrial smart cities were launched, compliance burdens were reduced, and ease of doing business rankings improved,” he explained.
Goyal also pointed to the surge in job creation driven by the manufacturing sector, citing the success of Apple’s iPhone 16, which is now made in India. “The iPhone 16 is being manufactured by women working at a factory in Chennai, Tamil Nadu. Similarly, India, once a country that imported air conditioners, has now emerged as a global manufacturer and exporter of air conditioning equipment, with 50% of components produced domestically. With four new compressor plants coming online, India will soon be a major exporter of air conditioners.”
He further noted that as the manufacturing sector grows, it fosters job creation in multiple areas, including factory construction, housing, infrastructure development, and logistics. “Manufacturing not only creates jobs but builds an ecosystem that fosters entrepreneurship and provides employment for young men and women. Let the critics continue, but the reality is clear: manufacturing is driving India’s economic success,” Goyal concluded.

September 26, 2024
Watch out for cybersecurity Threats in India
Keep an eye out for cybersecurity threats
India’s digital revolution is booming, but with growth comes a surge of cyber threats targeting everything from personal data to critical infrastructure. Cybercriminals are becoming increasingly sophisticated, making cybersecurity a pressing concern. Let’s explore the major cybersecurity threats in India and how we can combat them.

Cybercrime is on the rise

India is among the top targets for cyberattacks worldwide. With millions of new users online, cybercriminals exploit the rapid shift to digital platforms. From ransomware to phishing, these threats are wreaking havoc across various sectors.

Some of the major security threats are

Phishing Scams: Cybercriminals often disguise themselves as trusted entities, sending deceptive emails to steal sensitive information. These scams are getting more sophisticated, making them harder to detect

Ransomware: This type of malware locks users out of their data, demanding a ransom for its release. High-profile attacks on healthcare and financial institutions have highlighted the vulnerabilities in critical systems.

Malware and Spyware: Malware infiltrates devices through shady downloads or malicious ads, while spyware silently gathers data without user knowledge. Both pose significant risks to personal and organizational security.

Data Breaches: Weak security measures make many companies easy targets for hackers. Data breaches can lead to the theft of personal information and financial data, causing major reputational damage.

DDoS Attacks: Distributed Denial-of-Service attacks flood websites with traffic, crashing servers and disrupting business operations. These attacks can severely impact e-commerce and online services.

There are several challenges we face trying to combat these threats,

A significant challenge is the lack of cybersecurity awareness among individuals and businesses. Many fall victim to scams due to ignorance of basic security practices. There’s a critical shortage of skilled cybersecurity professionals in India. The gap between demand and supply hinders effective protection against cyber threats. Many organizations, particularly small businesses, underinvest in cybersecurity, leaving them vulnerable to attacks.

Fighting Back: India’s Cybersecurity Response

Government Initiatives: The Indian government is actively enhancing cybersecurity through initiatives like the National Cyber Security Policy and Cyber Swachhta Kendra, aimed at promoting best practices and improving resilience.

Public Awareness Campaigns: Educating the public about cybersecurity is essential. Awareness campaigns can help individuals recognize threats and adopt safer online behaviors.

Strengthening Regulations: Enhanced laws and enforcement can deter cybercriminals. A dynamic regulatory framework is needed to keep pace with evolving threats.

Investing in Technology: Embracing advanced technologies like AI and machine learning can help organizations detect and respond to threats in real time.

Conclusion

As India embraces the digital age, prioritizing cybersecurity is crucial. The threats are real and evolving, but with awareness, technology, and collaboration, India can turn the tide against cybercrime. It’s time to build a safer digital future, ensuring that technological benefits are not overshadowed by risks. If you are being scammed, you can report the incident to the cyber crime portal :
https://cybercrime.gov.in/Webform/Helpline.aspx
September 24, 2024
IIMA Ventures Launches Growth Accelerator 2.0 to Support 15 SMEs

IIMA Ventures Launches Growth Accelerator 2.0 to Support 15 SMEs

Participants will start with a three-day bootcamp at the IIM Ahmedabad campus, featuring workshops and sessions on scaling businesses, led by IIMA faculty.
IIMA Ventures, the startup incubator of IIM Ahmedabad, has launched Growth Accelerator 2.0, designed to support 15 SMEs, family businesses, and growth-stage startups in driving strategic growth and innovation. The program will offer knowledge sessions, masterclasses, workshops, founder talks, diagnostic panels, and mentoring clinics to help participants seize growth opportunities.
Founded in 2002, IIMA Ventures focuses on studying, educating, incubating, accelerating, and investing in early-stage startups, aspiring entrepreneurs, and investors. Partner-Incubation, Chintan Bakshi, explained that the accelerator addresses significant gaps in the Indian SME ecosystem. “SMEs, despite being crucial to the economy, often struggle to leverage innovation for rapid growth. Tools like emerging technologies, business optimization, and lean startup frameworks can unlock growth potential for them,” he said.
For established businesses, rapid growth often demands not only resources but also the ability to execute strategies effectively. Growth Accelerator 2.0 provides a structured environment for leaders to experiment with and implement new strategies, whether through streamlining operations, adopting scalable technologies, or building competitive advantages.
Participants will begin their journey with a three-day intensive bootcamp at the IIM Ahmedabad campus, where faculty-led workshops will focus on scaling businesses. Successful entrepreneurs will also share real-world insights on business growth. Over the following two months, participants will receive personalized mentorship from domain experts to help them overcome their specific challenges.
Regarding selection, Bakshi added that the process is ongoing. The selection focuses on businesses that have validated their models, achieved steady sales, and whose leaders are committed to experimenting with change. “We assess entrepreneurs willing to work with us to accurately identify and invest in growth areas,” he said.
The Growth Accelerator is open to leaders across all sectors, including second and third-generation entrepreneurs aiming to scale operations. The program kicks off in mid-October and runs annually.
The first batch of the accelerator supported 10 businesses from various sectors, including engineering, auto parts, FMCG, furniture manufacturing, agricultural equipment, and skills training. Participants came from cities like Vadodara, Ahmedabad, Indore, and Jamshedpur, with many from smaller, non-metro areas. In 2023, they developed growth strategies aimed at scaling their businesses by 5 to 10 times.

September 23, 2024
RBI Governor Recommends a Balanced Multi-Sectoral Focus

RBI Governor Recommends a Balanced Multi-Sectoral Focus Amid Manufacturing vs. Services Debate

Speaking at an event in Delhi, Reserve Bank of India (RBI) Governor Shaktikanta Das highlighted India’s potential growth rate at 7.5% and projected that the economy could “eventually” grow at 8%, adding that growth for the current year is expected to be 7.2%.
At a time when many policymakers and economic experts are debating whether India should prioritize manufacturing or services to drive economic growth, Das took a middle-ground approach. He emphasized that the country should not limit itself to one sector but instead focus on a multi-sectoral strategy.
Das stated that India’s economy, with its diverse sectors and 1.4 billion population, must embrace a balanced approach. “For a large country like India, with a diverse economy and many sectors and sub-sectors, each sector plays its own important role. So, India has to adopt a multi-sectoral approach,” he said during his speech at the Capital Foundation Society (CFS) awards event, where he was honored with a lifetime achievement award.
His remarks come amid prominent debates in economic circles. Former RBI Governor Raghuram Rajan has voiced concerns over India’s heavy focus on manufacturing at the expense of the services sector, which he believes has greater potential due to the country’s strong human capital. Rajan argued that India’s services industry could offer a more sustainable and climate-friendly path to growth. In contrast, Finance Minister Nirmala Sitharaman has stressed the need for India to enhance its presence in global manufacturing, stating that the sector must grow to help India become self-reliant and benefit from the post-pandemic shift in global supply chains away from China.
Das acknowledged both sides of the debate, noting that reforms such as the Production-Linked Incentive (PLI) scheme and the One Nation One Product (ODOP) initiative are already supporting the manufacturing sector. However, he also recognized the strengths of India’s services sector, particularly in areas like Global Capability Centres, where Indian entrepreneurship thrives.
Additionally, Das stressed the importance of continuing the country’s reform momentum, particularly in areas like land, labor, and agricultural marketing, to further bolster economic growth.
Regarding overall growth, Das expressed optimism about India’s economic resilience at a time when global growth is slowing and the economic drivers are shifting from developed nations to emerging markets. “The potential growth rate for India over the medium-term, which is the next three to four years, stands at 7.5%. This year, we estimate growth at 7.2%, but eventually, the Indian economy has the capability to grow at 8%,” he said, while adding that this assessment is conservative and measured.
Das’s forecast comes in the midst of contrasting views from other economic commentators, such as Axis Bank chief economist Neelkanth Mishra, who believes that sustained growth at 8% is unlikely, with 7% being a more realistic target. Nonetheless, Das remains cautiously optimistic about India’s long-term economic potential.

September 23, 2024
Digital Competition Bill Could Undermine MSME Ecosystem, Say Small and Medium Businesses

Digital Competition Bill Could Undermine MSME Ecosystem, Say Small and Medium Businesses

Members of the India SME Forum, the largest association of SMEs in the country, expressed concerns that the Digital Competition Bill (DCB) could adversely affect the MSME ecosystem and hinder India’s Viksit Bharat goals.
The industry body, representing small and medium enterprises (SMEs), warned on August 7 that the DCB could deter foreign direct investment (FDI) and limit the global competitiveness of MSMEs.
The Indian SME Forum hosted a roundtable in New Delhi to discuss the potential implications of the DCB on MSMEs and startups. The draft of the DCB, which was released in February, aims to address anti-competitive practices by Big Tech. However, it has faced widespread criticism from Indian businesses and startups, who argue that the bill could negatively impact their operations.
Vinod Kumar, President of the India SME Forum (ISF), emphasized during the roundtable that India has a unique opportunity to benefit from companies moving out of China. “Any regulation like the DCB could become a stumbling block in attracting FDI and promoting the global competitiveness of MSMEs,” Kumar stated.
Kumar also highlighted MSMEs’ concerns over the proposed ex-ante regulations—measures introduced in anticipation of certain impacts—especially those related to the use of personal data.
Aditi Madan, founder of Blue Pine Foods, stressed the importance of ensuring that SMEs have access to relevant information in the digital market economy. “Policy priorities should focus on directly engaging with SMEs during the creation process to ensure their needs and perspectives are adequately addressed,” she said.
Debashish Das, CEO of ElenchusHR Solutions, warned that overly stringent regulations could push businesses back to manual processes “reminiscent of the 70s and 80s,” hindering progress.
Amit Agrawal, founder of DSI Robotics, echoed these concerns, stating, “The Digital Competition Bill presents a safety paradox and could impose an undue compliance burden on small businesses, as has happened in the past.”

August 9, 2024
India’s Manufacturing Sector Growth Slows in July Amid Softer Orders and Output

India’s Manufacturing Sector Growth Slows in July Amid Softer Orders and Output

New Delhi: India’s manufacturing activity eased slightly in July due to softer increases in new orders and output, following a recovery in June from a three-month low in May.
The HSBC final India Manufacturing Purchasing Managers Index (PMI), compiled by S&P Global, recorded 58.1 in July, compared to 58.3 in June, 57.5 in May, and 58.8 in April. This index is based on responses from around 400 manufacturers.
Although the July reading was marginally lower than the flash projection of 58.5 released last month, it remained above both its long-term average and the 50-point threshold separating contraction from expansion, marking nearly three years of continuous growth.
“India’s manufacturing sector continued to post impressive growth in July, despite slightly softer increases in new orders and output. Key positive developments included one of the fastest expansions in international sales in over 13 years and another robust round of job creation,” the report stated.
However, strong demand also led to price pressures, with input costs rising at one of the quickest rates in nearly two years, resulting in the steepest increase in selling prices since October 2013.
Buoyant Demand
The report highlighted that buoyant demand had a positive ripple effect across the manufacturing industry, particularly through a substantial increase in new work intakes. Despite a slowdown since June, the pace of sales growth remained sharp, with production volumes significantly raised at the start of the second fiscal quarter.
“India’s headline manufacturing PMI showed a marginal slowdown in the pace of expansion in July, but with most components remaining at robust levels, the small drop is no cause for concern,” said Pranjul Bhandari, chief India economist at HSBC. “New export orders remain a bright spot… The continuous increase in the output price index, driven by input and labor cost pressures, may signal further inflationary pressure in the economy.”
Normal Monsoon Predicted
The Reserve Bank of India (RBI) has raised its FY25 GDP growth forecast from 7% to 7.2%, supported by improved rural and urban demand and predictions of a normal monsoon. These monsoon predictions are positive for agricultural output growth, with robust government capital expenditure, strong investment demand, and upbeat consumer and business sentiment contributing to the resilience of the Indian economy. However, geopolitical tensions and divergent monetary policies of major central banks have increased uncertainty.
In its June meeting, the RBI’s Monetary Policy Committee kept the benchmark rate at 6.25%. Retail inflation, which spiked to a four-month high of 5.08% in June, poses a challenge for policymakers aiming to reduce interest rates. The rise in June was mainly due to higher food inflation, which accounts for nearly 40% of the consumer price basket.
The PMI report noted that Indian goods producers raised selling prices to protect margins from cost increases. Firms cited higher fees for raw materials, increased labor costs, and strong demand as reasons for the upward adjustments to output charges.
“Amid reports of strengthening demand from clients based in Asia, Europe, North America, and the Middle East, Indian manufacturers experienced a robust increase in international sales during July,” the report added.

August 2, 2024
SEBI orders probe against SME IPO merchant banker for alleged violations while managing issues: Report

SEBI orders probe against SME IPO merchant banker for alleged violations while managing issues: Report

SEBI ordered an inspection of Corporate Capital Ventures and probed the operations and activities of the entity and its directors between August 2022 and June 2024.
Capital markets regulator Securities and Exchange Board of India (SEBI) is reportedly investigating Corporate Capital Ventures Limited. The Delhi-based merchant banker, which has managed some initial public offers (IPOs) of small and medium enterprises (SMEs), has come under the regulatory scanner for alleged violations of merchant banking regulations while managing public issues.
According to a report by news website Moneycontrol, SEBI has issued a notice to the merchant banking entity and named the company’s directors – Kulbhushan Parashar and Harpreet Kaur – along with a few other entities in the notice. The report added that the market watchdog’s investigation was triggered after it received an anonymous complaint alleging that Kulbhushan Parashar, through his relatives, bought shares in companies before taking them public.
SEBI ordered an inspection of the firm and probed the operations and activities of the entity and its directors between August 2022 and June 2024. During this period, Corporate Capital Ventures acted as the merchant banker for six SME IPOs: Oriana Power, Annapurna Swadisht, Droneacharya Aerial Innovations, Crayons Advertising, Creative Graphics Solutions India, and Rocking Deals Circular Economy.
According to the anonymous complaint received by SEBI, relatives of Kulbhushan Parashar were allotted 25,000 equity shares of Oriana Power on a private placement basis and 25,000 bonus shares. The allotment was made to Jagdish Kumar Prasad, and the IPO prospectus of Rockingdeals has listed Prasad as an immediate relative of Kulbhushan Parashar.
NSE imposes price control cap of 90% on SME IPO
Last month, NSE imposed a 90 per cent price control cap on SME IPOs amid rising concerns about froth in lesser-known SME stocks. “To standardise the opening price discovery and equilibrium price across exchanges during the special pre-open session for IPO on the SME platform, it has been decided to put an overall capping of up to 90 per cent over the issue price for SME IPOs,” said NSE in a circular.
The market regulator is already working on strengthening the eligibility criteria for the segment to ensure that fundamentally strong companies enter the market through the SME platform, launched in 2012. Earlier this year, SEBI chairperson Madhabi Puri Buch said some issuers and bankers were misusing the framework provided for SME listing. According to Buch, SEBI is collecting evidence following complaints of price manipulation in the segment.

August 2, 2024