India’s export sector has witnessed impressive growth in recent years, with total exports rising significantly from $497.9 billion in 2020-21 to $776.4 billion in 2022-23, marking a 56.1% increase. Key contributors include merchandise exports, which grew by 54.5%, and the sharp rise in electronic goods and mobile exports.

Over 1-1.5 Million engineering students graduate from various colleges across the country every year. A common guesstimate leaves us to at least 3 lakh mechanical engineers graduating every year. Such a large labor force, when utilized properly can contribute billions to the economy.

Year	Merchandise Export	Services Export	Overall Export – Merchandise plus Services	Export of Electronic Goods	Export of Mobiles
2020-21	291.8	206.1	497.9	11.1	3.1
2021-22	422	254.5	676.5	15.7	4.8
2022-23	451.1	325.3	776.4	23.6	11.1

Distribution across services in Billions (USD)

Source : data.gov.in

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The good news is – the Indian export market is growing at a good pace.

• The export of electronic goods has doubled from 2020
• The export of mobiles has almost tripled from 2020
• Total exports (merchandise + services) grew from $497.9 billion in 2020-21 to $776.4 billion in 2022-23, marking an increase of 56.1% over the three years.
• Merchandise exports increased from $291.8 billion in 2020-21 to $451.1 billion in 2022-23, a growth of 54.5%.
• Merchandise exports’ share of total exports remained high, at around 58-59% of total exports, showing its continued dominance in India’s export portfolio.

What India needs

India must adopt a focus that emphasizes both the economy and the workers involved in it. An increase in the wage of workers and the benefits offered to them may attract more people into the manufacturing sector.

Standardize wages

Offer a standardized package to engineering graduates which is at least enough to cover basic needs and expenses. The salary packages offered to mechanical engineering graduates by private firms in India stands as low as 1.5 LPA. The amount of mechanical graduates who shift to IT sector for its attractive wages is increasing at an exponential level.

“I was offered 12,000 a month after completing my degree, that too in Chennai. This is much less than what my peers get”

Murugan (Graduate – Chennai)

The positive light

Many companies offer graduates attractive incentives, including house-stays, food allowances, and shift allowances. As a positive consequence, these incentives have helped attract more graduates, particularly diploma holders, to remote locations.

Focus on skill training

The gap of skillset between tier-3, tier-2 and tier-1 college graduates is most visible in the mechanical sector. We spoke with a group of tier-3 graduates who were shocked by the facilities available at other colleges :

I went on a college sponsored visit to MIT Campus, Chennai. I was shocked at the amount of facilities that they had for mechanical students. All sorts of complex machines were available for purpose of student’s learning. These were much advanced than what we worked with.

All laboratories were properly maintained. Their emphasis on latest technology was very evident. This focus is missing from the college that I am coming from.

-Anonymous Tier-3 Chennai student, recollecting his visit to MIT Chennai.

Focus on EV

Let us be very honest – with the strict focus of ministers on EV, this technology is going to be at all forefronts in the future. The quality and price of EV cars in other countries, does indeed set a standard for the Indian sector. India must focus on R&D in the EV sector.

With the increasing petrol costs and stricter norms on diesel vehicles, EVs are sure to make a ground-breaking change in the automobile segment. Consequently, The affordability of EV cars may contribute billions to the economy.

Diversify Hotspots in the Country

The state of Tamil Nadu sets a strong example in this matter. Instead of focusing on Chennai alone, development has been focused at multiple places in the state, including Madurai, Trichy, Tiruppur, Coimbatore etc. Other states must also learn to diversify their hotspots for development.

This would enable locals to participate in their nearest economically strong zone, rather than travelling a large distance to one centralized zone.

Strong economies have always focused on Manufacturing & Export

Germany and Tamil Nadu share a similar population with a mild difference. Yet Germany’s GDP is much more than the GDP of India.

One clue that all economists offer is that Germany is industrially mature. Their focus on manufacturing, R&D has led them to this point.

Germany stands as one of the world’s most industrially advanced nations, boasting a strong manufacturing base, particularly in high-value-added sectors like automobiles (e.g., Volkswagen, BMW, Mercedes), machinery, chemicals, and precision engineering.

Also, Germany is a global leader in Industry 4.0, which refers to the integration of smart technologies like AI, robotics, and IoT (Internet of Things) into the manufacturing process.

This has allowed German industries to remain at the cutting edge of innovation, increasing efficiency and output. Therefore, These technological advancements have empowered Germany to maintain a competitive edge in global markets, resulting in sustained economic growth. Source : Germany Trade & Invest Website

The Positive way forward

India is actively transforming into a global manufacturing and innovation hub, making significant strides in sectors like electric vehicles, advanced manufacturing, and renewable energy.

Initiatives like Make in India, Atmanirbhar Bharat, and Production Linked Incentives (PLI) drive growth in high-tech industries, while adopting Industry 4.0 technologies, including AI, robotics, and automation and boost productivity.

With its young, dynamic workforce, thriving startup ecosystem, and rising foreign investment, India is poised for continued economic growth and is rapidly advancing toward industrial maturity in the coming decades.