India's Manufacturing Sector Set For Strong Boost

(MENAFN- Khaleej Times) Question: While the India growth story is based on a robust services sector, which contributes more than 45 per cent of the GDP, the manufacturing sector has not recorded the same rate of growth. Is this likely to change in the near future so that more industrial jobs are created?

ANSWER: Multinational companies are increasingly taking the view that India will emerge in the next few years as a new manufacturing hub of the world. This confidence is based on the fact that the supplier ecosystem is developing faster than was expected. The growth rate is based on higher domestic consumer spending especially in the new tech areas of electronics such as smartphones, electronic devices, and electric vehicles. Multinationals are expected to invest several billion dollars and set up factories in different states of India. To illustrate, a multinational giant like Foxconn, which has an annual turnover of around $10 billion, has already set up 30 factories in Andhra Pradesh and Tamil Nadu. This company proposes to set up additional factories in Gujarat, Karnataka, Telangana and other States. Therefore, not only will India emerge as a manufacturing hub for the world, but it will produce the latest and most sophisticated electronic products in areas where there is a growing global demand.

Question: Concerns have been expressed about the deleterious effect of AI in the absence of regulations. Yet, everybody is hankering after generative AI. Does this make sense?

ANSWER: Generative AI has been in focus this year and most consider it to be an inflection point for the technology sector. It will have a transformative impact on the lives of most people. Generative AI is a tool which can be used in a creative way and a new generation of work will emerge around AI skills. Most techies use generative AI for developing infrastructure for people who want to build their own models or a platform to develop applications. It improves speed of project delivery substantially. Engineers who have specialised in this field have embraced tools like GPT in everything to do with code development, like code analysis, code migration, documentation, and automated testing. AI has been infused in knowledge management systems and it has been integrated into service delivery platforms. Many companies are experimenting with large language models (LLMs). Industry-specific LLMs aim to solve problems and exploit bigger opportunities. LLM is particularly used for health care and manufacturing operations. One of the challenges facing global corporates is to create high performing teams of technicians, which can collaborate and communicate effectively.

H. P. Ranina is a practising lawyer, specialising in tax and exchange management laws of India.

Question: The recent meeting in India of G20 countries has ended. Will the decisions taken help developing and underdeveloped economies?

ANSWER: In order to support inclusive growth and sustainable development, G20 finance ministers and central bank governors have unanimously endorsed financial inclusion as a key theme. It has also been decided by the Global Partnership for Financial Inclusion (GPFI) to reduce the global costs of transferring funds by way of remittances to 5 per cent immediately and thereafter to 3 per cent. GPFI has suggested using digital finance tools to secure and enable financial services and products so as to reach out to such sections of society that are financially excluded at present. It has also been decided to provide finance at affordable rates to medium, small and micro enterprises in developing countries through innovative methods. For this purpose, it is proposed to use open and interoperable digital infrastructure and tools. This will help the deployment of Unified Payment Interface (UPI) and other technologies prevalent in India. It has been emphasised that the digital infrastructure must have adequate features for consumer protection. Further, the G20 countries have emphasized the need for regulating crypto assets in order to protect the interest of global investors. Reform of multilateral development banks, like the World Bank, has also been considered to help developing countries tackle the problem of poverty.

H. P. Ranina is a practising lawyer, specialising in tax and exchange management laws of India.


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