To be a catalyst for India’s ambition of becoming one of the top three global economies by 2050, the manufacturing sector must adopt a sustainable and inclusive model that decouples growth from emissions for a developing economy of this scale. This will lower our total cost of societal development. Over recent years, Indian manufacturing has successfully undergone a transformation, integrating global technology with local engineering. This evolution has created a foundation for a unique model that can drive significant economic growth. Here are the key areas pivotal to this model.
Sustainability in practice
India ranks fourth globally in renewable energy installed capacity, positioning it well to integrate sustainability into its manufacturing processes. There is substantial potential in manufacturing sectors like solar photovoltaic modules, battery storage, wind turbines, and various electrification and automation components essential for stabilizing and converting green power.
Beyond solar and wind, investments in green hydrogen, sustainable aviation fuel, carbon capture and battery storage are expected to reach approximately $35 billion annually by 2030. By 2031-32, India aims to build 47GW of battery storage capacity, which is comparable to installing nearly 80 of the largest battery storage facilities globally.
The infrastructure push by the government is also increasing the demand for sustainable products and solutions such as green steel and cement, energy-efficient motors and drives, resource monitoring, and tracking precision equipment. By developing and staying the course on sector-level decarbonization pathways, it is possible to mitigate about 50% of the cumulative emissions from the new steel and cement production capacity that will be added between now and 2040. Technology standards, price support and public outlay on critical support infrastructure are some of the ways how this model can be achieved.
Energy efficiency and younger, evolving infrastructure
During COP28, 130 countries signed a pledge to double the annual rate of energy efficiency improvements by 2030. For India, this goal is attainable as much of the country’s future infrastructure is still being developed with a digital layer.
An optimal route for this would be replacing International Efficiency 2 (IE2) with IE3 as the minimum efficiency standard for motors, leading to significant energy savings. Decarbonization, digitalization and electrification are creating new infrastructure in the social, digital and energy fields.
Future infrastructure development will increasingly consider the hydrogen supply chain and the electric vehicle (EV) value chain, from mining to gigafactories, EV charging and recycling. These developments present a solid opportunity for India to adopt a sustainable manufacturing model that caters to evolving structures.
Scalability of digital and automation solutions
A key success of this sustainable manufacturing model would emanate from the scores of small and medium companies and even big companies adopting customized and scalable digital solutions to drive sustainability in tier-II, III and IV cities across the country. Digitalization is a key enabler of sustainability and makes automation safer and greener. Indian companies thriving on the entrepreneurial spirit in tier-II and III cities have realized the potential of not only automation but also digitalization to render people, process and asset efficiency with resultant environmental sustainability.
At ABB in India, 37% of our customers are from tier-II and III cities. In some business areas, the contribution from these areas is even higher, reaching up to 40% of channel partner business with a five-year compound annual growth rate of 20%.
Across India, we have implemented diverse solutions. These include an edible oil company in Ganganagar, Rajasthan, which opted for automated drives and expellers; a spices company in Guntur, Andhra Pradesh, using an energy manager solution to monitor equipment; and energy terminals in Meerut, Uttar Pradesh, benefitting from digital solutions for monitoring low-voltage switchboards.
Having been involved in “digital” since the first use of microprocessors in automation offerings nearly 50 years ago, ABB has a long history of industrial automation and digital experience to further help industries improve production.
Enabling demography to continue as a dividend
India’s population is projected to reach 1.6 billion by 2040, with a significantly younger demographic. This growth will make India a major contributor to the global workforce, with a quarter of the 1.3 billion net additions expected to come from India. To accommodate this growth, manufacturing must play a strategic role alongside the service sector.
This involves not only training people in digital skills, but also deploying digital tools for efficiency and scalability of upskilling and reskilling across sectors. A sustainable manufacturing model driven by digitalization can significantly contribute to this effort.
Digital tools can facilitate speed and scale of skilling programmes, enhancing productivity and making Indian shop floors safer and more attractive to future generations. It is also crucial to create an inclusive environment that encourages more women to pursue careers in this sector.
Collaboration for value chains and localization
Collaboration is essential for the success of any model, particularly in localizing supply chains. The unique Indian manufacturing model can carve out its niche by adopting sustainable and circular economy practices, such as reducing the use of bioplastics in packaging and optimizing water usage.
Collaboration is needed to address value chain concerns related to import dependencies on items like certain grades of steel, copper and printed circuit boards. Long-lead supply chains, especially in electronics and semiconductors, require dedicated focus to co-develop and optimize facilities required especially in areas like assembly, testing and packaging. Increasing free trade agreements with various countries will also support these efforts.
Sanjeev Sharma is country head and managing director, ABB India.