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Riding on the wave created by the “Make in India” clarion call of the Honourable Prime Minister of India, manufacturing in India is expected to slowly but surely sweep back in the national economic space. India is expected to witness a surge in manufacturing growth after a previous period of decline which saw the contribution of manufacturing fall to less than 15% of the country’s GDP. There are grave reasons that necessitate the country's success in manufacturing. Manufacturing has linkages with the all other sectors of the economy. The progress of manufacturing will set the tone for the overall business cycle and the health of this sector is very much at the core of India's socio-economic fabric.


Inspite of the boom in the services sector, 75% of India's working population is educated only to middle school or below. This staggering figure of approximately 600 million people is not even equipped to benefit from the opportunities in the flourishing knowledge sector. It is only the labour intensive manufacturing sector that has the capability to generate employment in adequate numbers to absorb a larger labour pool.


Manufacturing has large stakes involved, not just because the sector employs 30 per cent of the non-agricultural workforce in India, but also because of its contribution to the overall economy/GDP. Even though agriculture supports 60% of the working population, it contributes only 22% of the country's gross domestic product. This mismatch between distribution of workforce and value added in agriculture is one of the main reasons for the large number of poor, and this trend is expected to further widen in the coming decades. Against this background, only a sharp growth in the Indian manufacturing sector will increase overall income levels of the country.


The economic benefits of playing the manufacturing card are quite clear - if India is to reach overall GDP growth of 8% per annum, it is essential that both manufacturing and services grow at more than 11% even when agriculture growth picks up from its current 2.3%.


The Petroleum Refining Sector is one of the key drivers of the Indian economy with significant export capacity after meeting domestic demand. The Petrochemicals sector which is an offshoot of the Petroleum sector, is largely Naphtha driven in India with the vital building blocks - ethylene and propylene being generated largely by Naphtha crackers. The Polyester sector similarly is driven by Paraxylene, which again is generated from Naphtha reforming.


Considering the expected glut in ethane crackers riding on the back of North American shale gas discoveries and consequently the expected shortfalls in C3-C6 based petrochemicals, India is uniquely placed to contribute to the manufacturing economy of the entire South Asian region by optimising and expanding its Petrochemicals sector.


Manufacturing segment of Petrochemicals can be boosted by way of targeted investments in Innovative, sustainable, efficient and environmentally friendly technologies which can be leveraged to increase the efficiency of Petrochemicals manufacture – both raw material and downstream.


Manufacturing cannot grow on technology and skill alone and investments in efficient supply chain management systems and infrastructure are a pre-requisite to sustained growth. In today's business environment, manufacturers need to increase productivity through the entire supply chain - this necessitates that real-time data from the plant floor be made available to their ERP, SCM, and Manufacturing Execution Systems (MES) systems, thus integrating plant floor data with business systems. Another sector which needs attention is the Logistics sector where service providers are largely unorganised, leading to poor service standards and distribution bottlenecks especially considering the poor road and rail networks.


Upgradation of skills for the manufacturing workers is another key area which needs urgent focus along with addressing regional imbalances in the production and consumption of key petrochemicals in India and South Asia.


The 4th IndianOil Petrochemical Conclave is targeted at exploring the various issues with regard to boosting the manufacturing sector in India and studying the fundamentals and possible future of the Petrochemical Manufacturing sector.

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