Union Budget 2023 favors India’s manufacturing Industry

This editorial was first published in the March issue of Automation & Instrumentation update magazine.

This editorial was first published in the March issue of Automation & Instrumentation update magazine.


Anil Kumar, Director - Inovance Technology India

The Union Budget for 2023 has demonstrated clear support for manufacturing from the Modi 2.0 Government. With the focus firmly on R&D, youth opportunities, jobs growth, urban development, infrastructure, and green growth, the Budget will provide a critical boost to the economy, and it looks as though the manufacturing industry is being positioned to take a lead.

Union Finance Minister Nirmala Sitharaman presented the Union Budget 2023 earlier this month, declaring that “the world has recognized India as a bright star” and pointing out that economic growth for the current year is forecast to be 7%, the highest of all major economies. She added that the economy has increased in size from the 10th to 5th largest in the world in the last nine years, despite challenges from the global slowdown resulting from Covid-19 and the war in Ukraine.

In the last full Budget before next year’s election, Minister Sitharaman said India’s economy is heading towards a bright future. She announced a range of initiatives that will boost manufacturing, including a focus on production of green technologies such as domestic electric vehicle (EV) manufacturing. This included tax incentives for machinery used to make Li batteries and raw materials for the EV industry, as well as a 1 year extension to concessional duty on Li cells for batteries. In other sectors, the customs duty cut for imports of mobile phone parts was extended by 1 year and customs duty on open cells of TV panels falls to 2.5%, to boost electronics manufacturing.

As part of its Make in India initiative, the Indian government provides a range of incentives for local manufacturers. Launched by Prime Minister Modi in 2014, the aim of Make in India is to encourage investment from around the world, foster innovation, generate jobs, improve the ease of doing business in India and enhance manufacturing infrastructure. The initiative sets a goal of increasing the manufacturing industry’s contribution to GDP to 25% by 2025 and is seeing strong progress. For example, there was a sharp upturn in the seasonally adjusted S&P Global purchasing managers’ index in December 2022, rising from 55.7 in November to 57.8 at the end of the year.

Amid predictions of strong performance for Indian manufacturing in the short-term, I believe the Government’s commitment to providing a strong impetus for growth will drive productivity and economic expansion. India is becoming a manufacturing powerhouse and automation will be central to this by helping to lift productivity, increase efficiency and improve the sustainability of Indian manufacturers. By using industrial automation to increase throughout, reduce errors, improve safety and quality, and cut costs, companies can help to drive forward the Indian economy, positioning themselves and the Union for even greater success in the future.

Our company, Inovance, is a complete industrial automation solutions provider with expert engineering capabilities, with products ranging from AC drives, servo drives and motors, to motion control, industrial robots, PLCs, CNCs, and HMIs. Inovance has $3bn revenues and global operations, and has invested heavily in India via its Indian arm: Inovance Technology India. In order to expand our market presence in manufacturing and incorporate the “Make in India” principles into our operations, Inovance India recently opened a major facility in Chennai. This new plant will significantly improve our range of customer-facing operations, including product stock management, product updates, and assembly of energy saving servo pumps for plastic injection machines. Additionally, our new site manufactures elevator remote IOT devices and servo cables. Other

important Inovance Technology India activities include service and repairs, as well as R&D functions such as product testing and software development.

To continue the conversation about industrial automation, email Anil today: anil.kumar@inovance.ind.in.