Urbanisation has long been acknowledged as a potent driver of economic growth, and its impact is particularly pronounced in manufacturing and mobility. As rural populations migrate to urban centres, cities transform into vibrant hubs of activity, fostering innovation, attracting investments, and facilitating infrastructure development. This demographic shift alters the composition of populations and spurs demand for goods, services, and transportation solutions, laying the groundwork for substantial economic expansion. Urbanisation, characterised by the movement of people from rural to urban areas, is reshaping the global economic landscape. According to the United Nations, over half of the world's population currently resides in urban areas, which is expected to surpass 68% by 2050. India epitomises this trend as one of the world's fastest-growing economies, with urbanisation serving as a potent catalyst for its economic ascension.
India's economic landscape is changing remarkably as it transitions from service-oriented to manufacturing-driven. Positioned at the brink of a transformative era in manufacturing, India offers a viable alternative to the long-standing dominance of global manufacturing. While China has historically held the mantle of a manufacturing superpower, attention is now turning towards India, promising significant economic growth and employment opportunities. With a notable surge of 15% in manufacturing investments last fiscal year, confidence in the sector's potential for economic expansion and job creation is on the rise. Multinational corporations such as Samsung, Apple, and Toyota, alongside Indian companies, are ramping up investments by establishing or expanding manufacturing facilities in India, further bolstering investment inflows. With the manufacturing sector contributing approximately 14% to India's GDP, concerted efforts are underway to emulate China's global manufacturing leadership.
Amidst the robust growth of India's manufacturing sector, which plays a crucial role in the nation's economic development, automobile manufacturing emerges as a primary catalyst for this expansion, contributing 7.1% to GDP and employing over 19 million people. With India emerging as one of the world's largest automobile markets, the sector has witnessed significant investments, technological advancements, and innovation. Furthermore, the sector's growth has spurred the development of a robust ecosystem of suppliers, component manufacturers, and ancillary industries, further amplifying its impact on the economy. As India continues to position itself as a global manufacturing hub, the automobile manufacturing sector remains at the forefront, driving growth, innovation, and employment opportunities across the nation. Proactive policy reforms, incentivising investments, and fostering skill development drive this transformation, which is aligned with India's commitment to green energy and sustainability goals.
India's manufacturing sector is also experiencing a notable shift towards sustainable mobility solutions, acknowledging the significance of efficient and eco-friendly transportation systems in urban areas. This growing demand for mobility solutions directly results from urbanisation, underlining the vital role cities play in shaping transportation trends and fostering economic growth through innovative mobility solutions. Future mobility solutions prioritise intermodal connectivity, personalised experiences, and sustainable resource utilisation, driven by technological advancements and environmental awareness. India is leveraging advanced technology and design to drive the industry forward and meet the evolving needs of urban mobility.
Moreover, these solutions will prioritise personalisation, catering to each traveller's unique needs and preferences through customisable routes and on-demand services. This focus on individual experience enhances user satisfaction and comfort. Future mobility solutions will also emphasise sustainable resource utilisation to minimise environmental impact. From electric vehicles to infrastructure designs promoting walking and cycling, sustainability will drive transportation planning and development, contributing to cleaner and healthier urban environments. The country's embrace of electric vehicles, smart transportation networks, and innovative mobility startups underscores its commitment to addressing urbanisation challenges while capitalising on economic opportunities.
India's economic landscape is amidst an exhilarating transformation fuelled by urbanisation, manufacturing prowess, and innovative mobility solutions. As the global populace increasingly gravitates towards urban living, India's thriving urban centres are beacons of burgeoning demand for goods, services, and efficient transportation. Seizing this monumental shift, India strategically channels investments into domestic manufacturing initiatives like Make in India to fortify the nation's industrial capabilities while tackling urbanisation challenges head-on.
Furthermore, India's proactive adoption of cutting-edge technology and design propels it onto the global stage as a potential manufacturing powerhouse. Western corporations, driven by the need to diversify manufacturing bases beyond China, are now focusing on India, ushering in a new era of opportunity and growth. The robust manufacturing infrastructure and efficient supply chain management, combined with significant enhancements in India's education, infrastructure, and social sectors over the past 25 years, have contributed to developing a high-calibre talent pool in design, engineering, manufacturing, and management. India's steadfast commitment to delivering high-value manufacturing solutions and a relentless pursuit of cost-effectiveness align seamlessly with prevailing global industry trends. This convergence of factors propels India to the forefront of the worldwide manufacturing arena, promising a future brimming with potential. Improved digital and physical connectivity and the provision of essential amenities further bolster India's position as a powerhouse on the global stage.
The author, Nagesh A Basavanhalli, is Non Executive Vice-Chairman at Greaves Cotton Ltd. The views expressed are personal.
