Make in India: Startups Powering India’s Manufacturing Sector

The Make in India initiative, launched by Prime Minister Narendra Modi in 2014, has been a game changer for India’s manufacturing sector. Designed to boost domestic manufacturing, encourage foreign investment, and make India a global manufacturing hub, the initiative has empowered startups to play a pivotal role in revolutionizing the sector. By reducing regulatory red tape, offering incentives, and creating a conducive business environment, Make in India has opened unprecedented opportunities for startups, especially in hardware, consumer goods, and electronics manufacturing.

The Growing Role of Startups in Manufacturing

The Make in India program laid the foundation for startups to thrive in India’s manufacturing ecosystem. Traditionally dominated by large-scale enterprises, the sector now sees a significant contribution from startups bringing fresh innovation, agility, and cutting-edge technologies. Startups have been able to leverage the growing demand for locally-made products, spurred by both national pride and global supply chain challenges.

One of the major success stories is boAt, a consumer electronics startup founded in 2016. Known for its affordable, high-quality headphones, boAt embraced the Make in India ethos by setting up local manufacturing units and relying less on imports. In a short span, the startup not only captured a significant market share but also demonstrated the potential of Indian hardware companies on the global stage.

Make in India’s Impact on Key Sectors

1. Hardware Manufacturing Startups in India’s hardware sector have seen an exponential rise, particularly in electronics and telecommunications. With schemes like the Production Linked Incentive (PLI), the government has encouraged domestic manufacturing, providing startups with substantial financial support.

   Startups like Noise (consumer electronics) and GOQii (wearable fitness technology) are notable examples of companies that have benefited from Make in India. By manufacturing locally, they’ve not only reduced dependency on imports but also gained a competitive edge through cost efficiency and speed-to-market advantages.

   Statistic: According to the Indian Electronics and Semiconductor Association (IESA), India’s electronics manufacturing sector is expected to reach $300 billion by 2025, with significant contributions from startups.
   
   

2. Automotive Manufacturing The automotive sector has also witnessed a boost, particularly in electric vehicle (EV) manufacturing. Startups such as Ather Energy and Ola Electric have emerged as leaders in the EV space, pushing India towards greener transportation solutions while promoting the Make in India ethos. Both companies have established state-of-the-art manufacturing facilities, generating local employment and reducing the reliance on imported technology.

   Statistic: Ather Energy has set up an 8.4-acre electric vehicle manufacturing plant in Hosur, Tamil Nadu, with a production capacity of 110,000 vehicles per year.
   
   

3. Consumer Goods The consumer goods sector is another area where Make in India has catalyzed startup innovation. From electronics to home appliances, startups like Atomberg Technologies (smart ceiling fans) and Hindware Appliances are redefining the manufacturing landscape by offering smart, energy-efficient products to Indian consumers.
   
   

Key Government Initiatives Supporting Manufacturing Startups

Several government programs and schemes have been integral in supporting startups in the manufacturing sector:

1. Production Linked Incentive (PLI) Scheme The PLI scheme offers financial incentives for manufacturing in key sectors such as electronics, automobiles, and pharmaceuticals. By linking financial rewards to production volumes, the scheme incentivizes startups to scale up and compete globally.
   

2. Startup India Initiative As part of Startup India, various regulatory reforms, financial support, and incubation programs have been introduced to aid startups across sectors, including manufacturing. The simplification of compliance procedures and the introduction of benefits such as tax exemptions have further eased the process for startups to enter the manufacturing domain.
   

3. Credit Guarantee Fund Scheme for Startups (CGFS) This scheme offers collateral-free loans, which have been instrumental for startups looking to set up manufacturing units but lacking the capital to do so.

   Statistic: Over ₹7,500 crore has been committed by SIDBI as part of the Fund of Funds for Startups (FFS), facilitating the growth of startups in various sectors, including manufacturing.
   
   

Challenges Facing Manufacturing Startups

While the Make in India initiative has unlocked tremendous potential, startups still face challenges such as:

• High Initial Costs: Setting up a manufacturing unit requires significant investment, and not all startups have easy access to large amounts of capital.
  

• Skilled Labor: The shortage of highly skilled labor in specialized fields such as electronics and hardware manufacturing can hinder growth.
  

• Supply Chain Issues: Startups often face disruptions in sourcing raw materials, impacting production timelines.

Startups and Investors

• Leverage Government Support: Startups should actively engage with the PLI Scheme and Startup India initiatives to secure funding and regulatory assistance.
  

• Focus on Innovation: Manufacturing startups must emphasize innovation, especially in sectors like EVs, smart appliances, and electronics, where demand is high.
  

• Scaling Up: Investors should back startups that have the potential to scale rapidly in the manufacturing sector, especially those that can integrate cutting-edge technologies like AI, IoT, and robotics into their processes.

  
  

Make in India has opened doors for startups, empowering them to contribute significantly to India’s manufacturing sector. With a supportive policy environment, rising demand for locally made products, and the agility of startups, India is well on its way to becoming a global manufacturing powerhouse. By capitalizing on government incentives and adopting innovative manufacturing technologies, startups have the opportunity to revolutionize the sector and drive India’s economic growth.

India’s manufacturing landscape is undergoing a quiet revolution, and at its heart are the startups that are breaking barriers, creating jobs, and fueling the country’s growth engine.