India’s manufacturing dream: Is China outskilling India in the race for manufacturing dominance?

Despite government initiatives like "Make in India" and "Atmanirbhar Bharat," India’s manufacturing sector continues to face challenges in attracting youth, addressing the skill gap, and matching China's industrial prowess. These hurdles have far-reaching implications, hindering India’s aspirations to become a global manufacturing hub and reduce reliance on imports.

Rakshit Kejriwal, president of Phillips Education, highlights the disconnect between young Indians and manufacturing careers. “In schools, there’s no exposure to manufacturing. By the time students make career choices, they’ve already ruled it out,” he says. This perception is exacerbated by the dominance of IT and emerging fields like artificial intelligence and digital marketing, which are seen as more lucrative and sophisticated.

Even at the operator level, manufacturing jobs face stiff competition from gig economy roles. As Kejriwal explains, “Why would someone spend time learning manufacturing skills when they can earn ₹20,000–₹40,000 monthly driving for quick-commerce or ride-hailing companies?”

According to the India Skills Report 2024, India aims to create 90 million non-farm jobs by 2030. However, fewer than 5% of the workforce has formal skill training, and nearly half of employers report difficulty finding skilled talent. Kejriwal notes that while India doesn’t lack manpower, the absence of relevant skills is a major bottleneck.

“Today, students in ITIs (Industrial Training Institutes) are learning outdated methods, and even engineering students are gravitating towards IT jobs,” says Kejriwal. In response, Phillips Education has partnered with state governments to establish advanced manufacturing training centers. Equipped with modern technology like 3D printers and robotics, these centers aim to bridge the skills gap. However, scaling these efforts nationwide remains a significant challenge.

Why India Struggles Against China

India’s inability to compete with China stems not from work hours but from infrastructure and investment gaps. China’s head start in manufacturing, fueled by large-scale investments in advanced machinery and skill development, has placed it decades ahead. “China started investing heavily in manufacturing while India focused on IT,” observes Kejriwal.

As a result, China operates at scales India is yet to achieve. For instance, Indian factories struggle to fulfill bulk orders for basic components like screws, forcing companies to rely on Chinese imports. While countries like Vietnam, Bangladesh, and the Philippines are positioning themselves as alternatives, Kejriwal notes that collectively, these nations—including India—can only replace 10–15% of China’s output in the next decade.

To bridge this gap, India must address deep-rooted perceptions of manufacturing as outdated or less prestigious. Kejriwal suggests early awareness campaigns in schools. “If students can experience the creativity and satisfaction of manufacturing early, they might view it as a viable career option,” he says. Moreover, for those with skills, jobs are plentiful, he adds.

The government has recognised these challenges and is incentivising private companies to invest in manufacturing hubs. For example, Andhra Pradesh offers subsidised land for aerospace and defence factories. However, without a skilled workforce, such initiatives risk falling short.

India’s manufacturing story is one of untapped potential. As Kejriwal aptly summarises, “The money and people are there. It’s just a matter of valuing manufacturing as a career.” For India to decouple from China and realise its manufacturing ambitions, this shift in perception—and policy—must happen urgently.