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Manufacturing
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Executive Summary
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Advantage India
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Evolution of Indian Manufacturing Sector
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Sub-sectors under Manufacturing
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Gross Capital Formation
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Capacity utilization in Manufacturing sector
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Role in Employment
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Notable Trends
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Strategies Adopted
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Growth Drivers in India
¨ Since Make in India initiative FDI inflows have risen
from US$ 34.9 billion in 2014-15 to US$ 61.9 in
2017-18
¨ Special cells called Japan Plus and Korea Plus have
been set up
¨ Samsung Facory to double production to 220 million
by 2020
¨ Softbank (Japan) has pledged YS$ 10 billion in
startups
¨ Xiaomi is planning to invest US$ 1 billion in startups
¨ Some Govt initiatives which have impacted
manufacturing
¤ Make in India
¤ Skill India
¤ National Manufacturing Policy
¤ National Investment and Manufacturing Zone (NMIZ)
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Impact of GST on Manufacturing sector
¨ Goods and Services Tax (GST) is expected to provide a major boost
¨ Before GST, excise duty had to be paid on MRP. Under GST excise duty is
on ex-factory transaction value leading to lower taxes
¨ Subsuming of entry taxes for inter state transfers will reduce the cost of
goods and services thereby boosting demand
¨ Manufacturers can claim input tax credit on input goods
¨ Unique GSTIN in place of service tax, VAT, CST.
¨ Warehousing and location decisions will be taken on the basis on
economic efficiency instead of tax efficiency
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Logistics
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Executive Summary
It is a very fragmented industry with top 10 players holding only 2% market share
Unlike global trends, the logistics sector in India has been growing at a healthy rate of
~8% over the last 5 years on strong demand drivers
Expected to reach USD 215 billion by 2020 (NITI Aayog Report)
New players/business models are expected to emerge amid the digitization and
automation of business processes, implementation of the new GST (goods and services
tax), and expansion in the 3PL/4PL service landscape. Integration may also happen.
The size of the logistics sector in India is estimated to be USD 160 billion
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Logistics is an integral activity for economic growth as it involves the management of flow
of goods from place of origination to place of consumption. The sector comprises
shipping, port-services, warehousing, rail, road and air freight, express cargo and other
value added services
Technology is being applied and implemented in different formats; physical automation
for trucking and warehousing; automated documentation and booking of parcels, online
marketplaces for comparing price and services, etc.
All these technological enhancements have provided benefits in the form of
disintermediation of services, cost rationalization and curbing inefficiencies
The growth of e-commerce has given way to specific logistics channels handling only last
mile deliveries. These channels ensure faster delivery and provide assured reverse
logistics and also collect payment. This model is a true 3PL (third-party logistics) service
offering
With the complexity involved and the level of automation required, big e-commerce
companies like Amazon and others have set up their own last mile delivery services and
are now entering as full fledged 4PL logistics service providers
Logistics in India
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Evolution of Logistics in India
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Model Mix in Transportation
¨ Rail is cheaper but underused in India as it suffers from capacity constraints
due to lack of infrastructure
¨ Road is costlier due to bad roads & inter-state tools that increase transit
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Waterways Consume Less Fuel
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OverviewConnectivityCongestion
India ranked
35th in
Logistics
Performance
Index (LPI) in
2016
LackofInfrastructure
Massive
investment
required to
build capacity
and efficient
operations
UnfavourableModalMix
Along with
inefficient
regulatory
policies,
lowers the
speed of
delivery
FragmentedMarket
No one has
been able to
build
economies of
scale
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Logistics Performance Index
¨ The efficiency of customs and border
management clearance
¨ The quality of trade- and transport-
related infrastructure
¨ The competence and quality of
logistics services
¨ The frequency with which shipments
reach consignees within the scheduled
or expected delivery time
¨ The ease of arranging and clearing
competitively priced international
shipments
¨ The ability to track and trace
consignments
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Roads
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Railways
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Major Ports in India
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Major Ports in India
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