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Manufacturing Sector

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Home/Indian Economy/Manufacturing Sector

Mains Answer Writing Latest Questions

Rohit Valiyan
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Rohit ValiyanLearner
Asked: June 22, 2024In:
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Describe the Design Linked Incentive (DLI) program. Talk about how this plan might affect India’s semiconductor manufacturing sector. (Answer in 200 words)

upsc: manufacturing sector
  1. Bharti Singh
    Bharti Singh Begginer

    The Ministry of Electronics and Information Technology has announced the Design Linked Incentive (DLI) Scheme to offset the disabilities in the domestic industry involved in semiconductor design in order to not only move up in value-chain but also strengthen the semiconductor chip design ecosystem iRead more

    The Ministry of Electronics and Information Technology has announced the Design Linked Incentive (DLI) Scheme to offset the disabilities in the domestic industry involved in semiconductor design in order to not only move up in value-chain but also strengthen the semiconductor chip design ecosystem in the country.

    It aims to offer financial incentives as well as design infrastructure support across various stages of development and deployment of semiconductor design(s) for Integrated Circuits (ICs), Chipsets, System on Chips (SoCs), Systems & IP Cores and semiconductor linked design(s) over a period of 5 years.

    This scheme can create a difference in the semiconductor manufacturing industry in India in the following ways:

    • Promoting R&D: It will provide funds for R&D under rising development costs and fulfil the needs of design that requires 12-20% of company sales back into R&D.
    • Establishing semiconductor ecosystem: It will help to create a vibrant semiconductor ecosystem, helping in development of modern complex chips, often leveraging external IP and design support services.
      • It aims to set up the India Chip Centre to host the state-of-the-art design infrastructure and facilitate its access to supported companies.
    • Financial support: It aims to provide financial support to companies setting up fabs or semiconductor making plants in India.
      • Under this scheme, a reimbursement of up to 50% of the eligible expenditure subject to a ceiling of Rs.15 Crore per application will be provided as fiscal support to the approved applicants who are engaged in semiconductor design.
      • Further, incentives would be provided to applicants whose semiconductor design and semiconductor linked design are deployed in electronic products.
    • Increase competition: The scheme will attract existing and global players as it will support their expenditures related to design software, IP rights, development, testing and deployment. This will encourage innovation in India apart from avoiding dependencies on a few countries or companies.
    • Increased capacity: The increased capacity of the semiconductor sector will spur demands from other sectors such as transportation, energy, agriculture etc. which will in turn fuel development of the semiconductor industry.
    • Access to larger markets: This scheme will help domestic companies to become part of the global value chain, thereby providing access to larger global markets.

    Considering these contributions, this scheme would add to economic strength and contribute towards the creation of a US$1 trillion digital economy with a multiplier effect to achieve a US$5 trillion economy by 2025 provided certain challenges such as rapid changes in technology, high competition, specialisation and expertise, threats to supply chain etc. are addressed. Thus, there is a need to promote research, strengthen the supply chain, improve the patent ecosystem, etc, to realise the true potential of the scheme. The DLI scheme along with the Production-Linked Incentive (PLI) scheme have a crucial role in shaping India as an efficient, equitable, and resilient design and manufacturing hub.

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Nicky soni
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Nicky soni
Asked: July 9, 2024In: , , , , ,
  • 2

Provide details on the distribution of rare earth elements in the world. Also, highlight their importance.

rare earth elements
  1. Vaibhav Mishra
    Vaibhav Mishra Begginer

    Rare Earth Elements (REEs) are a group of 17 elements with unique magnetic, electrical, and optical properties. They are found in small amounts in the Earth's crust and are often extracted from ores that contain other minerals. Here's an overview of the distribution of RREs around the world: China: Read more

    Rare Earth Elements (REEs) are a group of 17 elements with unique magnetic, electrical, and optical properties. They are found in small amounts in the Earth’s crust and are often extracted from ores that contain other minerals. Here’s an overview of the distribution of RREs around the world:

    1. China: China is the world’s largest producer and consumer of REEs, accounting for approximately 90% of global production. The majority of China’s REE deposits are found in the Bayan Obo mine in Inner Mongolia, which is also one of the largest iron ore deposits in the world.
    2. United States: The United States has significant REE deposits, particularly in California, Idaho, Montana, and Wyoming. The Mountain Pass mine in California is one of the largest REE mines outside of China.
    3. Australia: Australia has several significant REE deposits, primarily in Western Australia and South Australia.
    4. India: India has several REE deposits, particularly in the states of Andhra Pradesh, Odisha, and Karnataka.
    5. Africa: Africa is also a significant source of REEs, with major deposits found in countries such as South Africa, Namibia, and Mozambique.

    Importance of Rare Earth Elements:

    REEs play a crucial role in many modern technologies, including:

    1. Electronics: REEs are used in the production of electronics such as smartphones, laptops, and televisions due to their ability to improve performance and efficiency.
    2. Renewable Energy: REEs are essential components in wind turbines and solar panels, allowing them to generate clean energy efficiently.
    3. Aerospace: REEs are used in aircraft engines and components due to their high strength-to-weight ratio and resistance to corrosion.
    4. Automotive: REEs are used in electric vehicle motors and batteries, enabling improved performance and efficiency.
    5. Medical Devices: REEs are used in medical devices such as MRI machines and radiation therapy equipment due to their ability to enhance image quality and accuracy.

    The importance of REEs can be summarized as follows:

    1. Economic Growth: The demand for REEs is expected to continue growing due to their increasing use in various industries, driving economic growth and job creation.
    2. Environmental Sustainability: The use of REEs enables the development of sustainable technologies that reduce our reliance on fossil fuels and minimize environmental pollution.
    3. National Security: The strategic importance of REEs has led to concerns about national security, as access to these critical materials can impact a country’s technological advancements and economic competitiveness.
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Vihaan Choudhury
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Vihaan ChoudhuryLearner
Asked: January 22, 2025In:
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Roadmap for Answer Writing 1. Introduction: Briefly introduce the Production Linked Incentive (PLI) scheme and its role in strengthening India’s manufacturing sector. Mention the long-standing nature of India’s industrial policy, with the last major update in 1991. Pose the central question: whether a new ...

upsc: manufacturing sector
  1. Team
    Best Answer
    Team Supreme

    Model Answer Introduction The Production Linked Incentive (PLI) scheme has been a game-changer in strengthening India's manufacturing sector, attracting both domestic and foreign investments. However, despite its success, the need for a comprehensive industrial policy remains critical to ensure sustRead more

    Model Answer

    Introduction

    The Production Linked Incentive (PLI) scheme has been a game-changer in strengthening India’s manufacturing sector, attracting both domestic and foreign investments. However, despite its success, the need for a comprehensive industrial policy remains critical to ensure sustained and inclusive industrial growth. Below is an assessment of the role of the PLI scheme and the necessity for a new industrial policy.

    Role of the PLI Scheme

    1. Wide Coverage: The PLI scheme targets 14 key sectors like electronics, automobiles, pharmaceuticals, and textiles. This wide reach covers a substantial portion of the economy, fostering growth in diverse industries.
      Example: Electronics, automobiles, and textiles are all major sectors benefitting from the PLI scheme.
    2. Large-Scale Investments: By offering incentives, the PLI scheme has attracted over INR 1.03 lakh crore in investments, bolstering India’s manufacturing capabilities. Fact: By November 2023, the scheme had attracted INR 1.03 lakh crore in investments.
    3. Job Creation: The PLI scheme has the potential to create approximately 60 lakh new jobs across various sectors in the next five years. Example: The scheme is expected to stimulate job creation, particularly in manufacturing hubs.

    Need for a New Industrial Policy

    While the PLI scheme has delivered impressive results, a new industrial policy is crucial to address broader and long-term challenges:

    1. Comprehensive Framework: A new industrial policy would provide a more comprehensive framework, addressing not just sector-specific growth but also infrastructure development, skill enhancement, and research and development. Example: Infrastructure and skill development are key areas that need policy attention beyond the scope of the PLI scheme.
    2. Long-Term Vision: The PLI scheme focuses on short-to-medium-term objectives. A new industrial policy could outline strategic long-term goals for industrial transformation, guiding India’s manufacturing sector for decades to come.
    3. Inclusive Growth: The PLI scheme predominantly benefits large firms in certain sectors, but a new policy could promote inclusive growth by supporting small and medium enterprises (SMEs). Example: MSMEs could benefit from tailored incentives and support structures.
    4. Environmental and Social Considerations: A modern industrial policy should integrate sustainability, environmental standards, and social welfare considerations, ensuring equitable industrial growth. Example: Ensuring that industrialization also supports environmental goals and benefits all sections of society is vital.

    Conclusion

    While the PLI scheme is an important tool for boosting India’s manufacturing sector, a new industrial policy is essential to provide a broader, more inclusive, and sustainable framework for industrial development. Instead of replacing the PLI, the new policy can complement it, focusing on long-term strategic goals and addressing areas that the PLI does not cover.

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Anita Ratnam
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Anita RatnamLearner
Asked: January 20, 2025In:
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Roadmap for Answer Writing 1. Introduction (Contextualization) Begin by acknowledging India’s growing working-age population and the potential of labour-intensive manufacturing in addressing employment challenges. Provide relevant data to highlight the need for employment generation. For example: India’s working-age population (15-64 years) stood at 950.2 ...

upsc: manufacturing sector
  1. Team
    Best Answer
    Team Supreme

    Model Answer India's growing working-age population, expected to increase by about 9.7 million annually from 2021 to 2031, presents both an opportunity and a challenge. Labour-intensive manufacturing could help create jobs, but several barriers hinder this strategy. 1. Capital-Intensive Focus in ManRead more

    Model Answer

    India’s growing working-age population, expected to increase by about 9.7 million annually from 2021 to 2031, presents both an opportunity and a challenge. Labour-intensive manufacturing could help create jobs, but several barriers hinder this strategy.

    1. Capital-Intensive Focus in Manufacturing

    India’s manufacturing sector has been more capital-intensive than labour-intensive. The workforce in manufacturing shrank from 51 million in 2017 to 27.3 million in 2021, as industries focus more on automation and capital-heavy production processesmits the potential for job creation in sectors that traditionally employ large numbers of workers.

    2. Policy Gaps and Lack of Support for MSMEs

    While initiatives like Make in India and Production-Linked Incentive (PLI) schemes primarily target capital-intensive industries, the bulk of employment in manufacturing lies in MSMEs (Micro, Small, and Medium Enterprises). However, MSMEs struggle with inadequate banking, financial, and infrastructure support . There for policies that provide tailored support to MSMEs, especially in labour-intensive sectors like textiles, food processing, and footwear.

    3. Structural Bottlenecks

    India’s complex labour laws, restrictive land acquisition regulations, and high logistics costs (14% of GDP compared to under 10% in developed nations) further complicate the path to scaling labour-intensive manufacturing . These barriersnt and make manufacturing less competitive.

    4. Competition from Emerging Markets

    Countries like Bangladesh and Vietnam, which have benefited from lower production costs and better market access, are increasingly competing with India in global markets for labour-intensive products . India must address this rising coto retain its market share.

    5. Unskilled Workforce and Technology Upgradation

    A lack of formal skills training—only 21.2% of India’s workforce had such training in 2019 —limits productivity in labour-intensive secover, sectors like textiles have increasingly adopted automation, reducing the need for manual labour and hindering job creation.

    To tackle these challenges, India must focus on supporting MSMEs, improving infrastructure, and upskilling its workforce, creating a more favorable environment for labour-intensive manufacturing to thrive.

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Anita Dhruw
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Anita DhruwLegend
Asked: November 21, 2024In:
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Evaluate the performance of India’s Manufacturing sector under the ‘Production Linked Incentive’ initiative. What challenges need to be addressed to boost manufacturing growth?

manufacturing sectormsme
  1. shivamx
    shivamx Learner

    Evaluation of India’s Manufacturing Sector under the Production Linked Incentive (PLI) Initiative The Production Linked Incentive (PLI) scheme, launched in 2020, aims to boost India's manufacturing sector by offering financial incentives tied to incremental production. Targeting key sectors like eleRead more

    Evaluation of India’s Manufacturing Sector under the Production Linked Incentive (PLI) Initiative

    The Production Linked Incentive (PLI) scheme, launched in 2020, aims to boost India’s manufacturing sector by offering financial incentives tied to incremental production. Targeting key sectors like electronics, pharmaceuticals, textiles, and semiconductors, the initiative intends to reduce import dependence, enhance exports, and create jobs.

    Performance of the Manufacturing Sector

    1. Growth in Electronics Manufacturing:
      • India has emerged as a global hub for mobile phone production, with major firms like Apple and Samsung investing in local facilities.
      • Exports of electronics have increased, showcasing early success.
    2. Boost to Domestic Industry:
      • Sectors like pharmaceuticals (API production) and automobiles (EV components) have seen significant investment.
      • PLI schemes have attracted over ₹2.5 lakh crore in committed investments across multiple industries.
    3. Employment Generation:
      • PLI is expected to generate 6 million direct and indirect jobs, though full realization of this potential is ongoing.
    4. Export Growth:
      • Increased production capacity is leading to higher exports in targeted sectors, particularly electronics and textiles.

    Challenges in Boosting Manufacturing Growth

    1. Slow Disbursal of Incentives: Delays in financial support discourage smaller manufacturers from participating.
    2. Infrastructure Gaps: Poor logistics and energy availability hinder efficient production and competitiveness.
    3. Supply Chain Disruptions: Dependence on imported raw materials limits resilience, especially in sectors like electronics and semiconductors.
    4. Skilled Workforce Shortage: Insufficient training hampers scaling up advanced manufacturing industries.
    5. Regulatory Hurdles: Complex approval processes and compliance requirements deter investment.

    Conclusion

    The PLI initiative has spurred early gains, particularly in electronics and pharmaceuticals, marking a significant step toward India’s goal of becoming a global manufacturing hub. However, addressing challenges like infrastructure, workforce development, and faster policy implementation is critical to sustaining growth and achieving long-term success in the manufacturing sector.

     

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Team
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TeamSupreme
Asked: September 10, 2024In:
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Roadmap for Answer Writing 1. Introduction Define the context: Industrial growth in relation to GDP growth in India post-reforms. State the significance of the industrial sector in the economy. 2. Reasons for Lagging Industrial Growth A. Inadequate Infrastructure Discuss the challenges posed by insufficient physical infrastructure. Fact: ...

upsc: manufacturing sectors
  1. Team
    Team Supreme

    Model Answer Introduction The industrial growth rate in India has lagged behind the overall growth of Gross Domestic Product (GDP) in the post-reform period. While the industrial sector contributes significantly to the economy, accounting for 27.6% of GDP, its growth has remained stagnant at aroundRead more

    Model Answer

    Introduction

    The industrial growth rate in India has lagged behind the overall growth of Gross Domestic Product (GDP) in the post-reform period. While the industrial sector contributes significantly to the economy, accounting for 27.6% of GDP, its growth has remained stagnant at around 2-3%, compared to GDP growth rates exceeding 6-7%.

    Reasons for Lagging Industrial Growth

    1. Inadequate Infrastructure:
      The industrial sector suffers from a significant deficit in physical infrastructure, necessitating an investment of $1 trillion to improve capacities and efficiency.
    2. High Logistics Costs:
      Poor quality of industrial infrastructure has led to high logistics costs, making Indian goods less competitive globally. India spends 2-3 times more on logistics than its competitors.
    3. Restrictive Labour Laws:
      Complex and rigid labour laws create challenges for employers, often leading to legal complications that hinder industrial growth.
    4. Complicated Business Environment:
      A multi-layered tax system with high compliance costs adversely affects the competitiveness of manufacturing. India ranks poorly in regulatory aspects according to the Ease of Doing Business (EoDB) 2020 report.
    5. Low Investment in Technology:
      The reliance on inefficient and outdated technologies results in low productivity and higher costs, further disadvantaging Indian products in international markets.

    Recent Changes in Industrial Policy

    The Department of Industrial Policy and Promotion (DIPP) has introduced several initiatives aimed at revitalizing industrial growth:

    • Policy Goals: The National Manufacturing Policy aims to increase the manufacturing sector’s contribution to GDP to 25% by 2025, while the foreign trade policy aims to double exports.
    • Investment in Technology: The policy seeks to attract $100 billion in Foreign Direct Investment (FDI) annually, up from $60 billion in 2016-17, to enhance technological access.
    • Targeting Key Sectors: Focus on sectors like automobiles, electronics, and renewable energy to create commercially viable industries.
    • Tax Benefits: New manufacturing units benefit from a reduced corporate tax rate of 15%.
    • Labour Market Flexibility: Enhancements in labour market policies aim to increase job creation in the formal sector.

    While these initiatives are long-term measures, they are expected to positively impact industrial growth in the future.

    Conclusion

    The industrial growth rate in India has lagged due to various structural challenges. However, recent policy changes by the DIPP aim to address these issues and stimulate growth in the industrial sector.

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Team
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TeamSupreme
Asked: September 10, 2024In:
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Roadmap for Answer Writing Introduction: Briefly define the manufacturing sector’s contribution to GDP and the significance of MSMEs. State the purpose of the answer: to assess how current policies support growth in this sector. Importance of Increasing Manufacturing Sector Share: Rural Development: Explain how manufacturing ...

upsc: manufacturing sectors
  1. Team
    Best Answer
    Team Supreme

    Model Answer Introduction The manufacturing sector is vital for India’s economic landscape, contributing approximately 17% to the GDP in 2022. Micro, Small, and Medium Enterprises (MSMEs) account for about 40% of manufacturing output, playing a significant role in job creation, exports, and overallRead more

    Model Answer

    Introduction

    The manufacturing sector is vital for India’s economic landscape, contributing approximately 17% to the GDP in 2022. Micro, Small, and Medium Enterprises (MSMEs) account for about 40% of manufacturing output, playing a significant role in job creation, exports, and overall economic growth. Recognizing this importance, the Indian government has implemented various policies aimed at bolstering this sector.

    Importance of Increasing Manufacturing Sector Share

    1. Rural Development: Manufacturing is essential for rural upliftment. Initiatives such as Agro-based industries and Rural Self Employment Training Institutes (RSETIs) empower rural entrepreneurs, thereby enhancing economic conditions in these areas.
    2. Economic Resilience: A diverse manufacturing sector can provide stability during economic downturns. For example, small enterprises adapted during the COVID-19 pandemic to produce essential goods like masks and sanitizers, showcasing resilience.
    3. Employment Generation: According to the Ministry of MSMEs, this sector has created around 11 crore jobs in India. Small manufacturing units, tailoring shops, and handicrafts provide extensive employment opportunities.
    4. Innovation: MSMEs often serve as incubators for innovation. Companies like Flipkart and Zoho started as small enterprises and have revolutionized the e-commerce and software sectors.
    5. Exports: MSMEs contribute approximately 48% to India’s total exports, showcasing products like jewelry and spices, which are in high global demand.

    Government Policies Supporting the Manufacturing Sector

    1. Make in India (2014): This initiative promotes India as a global manufacturing hub, exemplified by Samsung’s establishment of its largest mobile factory in Noida.
    2. MSME Samadhaan: A platform for MSMEs to address delayed payments, enhancing financial stability and operational continuity.
    3. Udyam Registration: Simplifies the registration process, encouraging new ventures to formalize and access government benefits.
    4. GST Implementation: Streamlined tax structures reduce the tax burden on MSMEs, promoting compliance and encouraging formalization.
    5. Startup India: This initiative fosters entrepreneurial growth by providing fiscal incentives and support, leading to notable success stories like Zomato.
    6. Cluster Development Program: Enhances competitiveness through the development of industry clusters, such as in Kanpur’s leather sector.
    7. Government e-Marketplace (GeM): Facilitates market access for MSMEs by connecting them with government buyers, thus expanding their reach.
    8. Digital MSME Scheme: Promotes digital literacy and technology adoption, helping businesses streamline operations and improve efficiency.

    Conclusion

    The current policies reflect a robust framework aimed at enhancing the manufacturing sector’s contribution to India’s GDP. By creating a supportive environment through effective implementation of these initiatives, the government can significantly accelerate the growth of MSMEs and manufacturing, ultimately driving economic development.

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Team
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TeamSupreme
Asked: August 27, 2024In:
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What are the reasons behind India’s industrial illness? Make appropriate recommendations to solve the issue. (125 Words) [UPPSC 2019]

uppsc: manufacturing sector
  1. Sanaya Gowda
    Sanaya Gowda Begginer

    Causes of Industrial Sickness in India and Suggestions to Overcome the Problem 1. Causes of Industrial Sickness: Financial Mismanagement: Poor financial planning and inadequate capital management lead to cash flow issues. For example, IL&FS crisis (2018) highlighted issues of liquidity and finanRead more

    Causes of Industrial Sickness in India and Suggestions to Overcome the Problem

    1. Causes of Industrial Sickness:

    • Financial Mismanagement: Poor financial planning and inadequate capital management lead to cash flow issues. For example, IL&FS crisis (2018) highlighted issues of liquidity and financial mismanagement in large firms.
    • Technological Obsolescence: Failure to update technology results in inefficiency. Many small and medium enterprises (SMEs) face this issue due to lack of investment in modern equipment.
    • Operational Inefficiencies: Ineffective management practices and operational inefficiencies, such as those seen in textile mills in Tamil Nadu, contribute to industrial sickness.

    2. Suggestions to Overcome the Problem:

    • Financial Restructuring: Implementing financial restructuring plans and improving access to credit can help. Revival packages from the government can assist distressed firms.
    • Technology Upgradation: Encourage investment in new technology through subsidies and grants. Initiatives like the Production Linked Incentive (PLI) Scheme aim to boost technological advancements.
    • Operational Efficiency: Improve management practices and streamline operations through training and consultancy services.

    Conclusion: Industrial sickness in India stems from financial mismanagement, technological obsolescence, and operational inefficiencies. Addressing these issues through financial restructuring, technology upgrades, and improved management practices can help mitigate the problem.

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Ishan
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IshanBegginer
Asked: August 20, 2024In: , , , , , , ,
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  1. Umang Singh Yadav
    Umang Singh Yadav Expert

    The technology sector drives economic growth, innovation and societal transformation through developing and implementing digital solutions, products and services, enhancing productivity, connectivity and quality of life globally effectively.The Indian government is actively supporting the growth ofRead more

    The technology sector drives economic growth, innovation and societal transformation through developing and implementing digital solutions, products and services, enhancing productivity, connectivity and quality of life globally effectively.The Indian government is actively supporting the growth of startups in the technology sector through various initiatives.

    Initiatives – 

    1. Atmanirbhar Bharat App Innovation Challenge boosts India’s tech sector, promoting homegrown apps, digital sovereignty and innovation, driving self reliance and growth.
    2. SAMRIDH Scheme catalyzes India’s tech growth, funding startups, fostering innovation, entrepreneurship and job creation, bridging funding gaps nationwide effectively.
    3. Startup India Seed Fund fuels tech startups’ growth providing critical early stage funding catalyzing innovation and nurturing India’s digital ecosystem.
    4. Startup India Initiative boosts tech sector growth, fostering entrepreneurship, innovation and job creation through tax incentives, simplified regulations and funding.
    5. Atal Innovation Mission (AIM) drives tech advancement, cultivating innovation hubs, incubators and tinkering labs, nurturing India’s startup and entrepreneurship ecosystem.
    6. Digital India transforms the nation, leveraging technology to enhance governance, connectivity, accessibility and services, bridging digital divides and fostering growth.

     

    India’s technology sector faces challenges including digital divide, infrastructure gaps, cybersecurity threats, talent shortages, regulatory frameworks, data privacy concerns, funding constraints and intense global competition, hindering growth and innovation potential.

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Eshan Fernandes
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Eshan FernandesBegginer
Asked: July 26, 2024In:
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Analyze how the manufacturing sector contributes to India’s export performance and the government’s efforts to diversify export markets, increase the sector’s export competitiveness, and deal with supply chain disruptions and conflicts in the global trade arena.

upsc: manufacturing sector
  1. Yash Sihare
    Yash Sihare Begginer
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