New Delhi, India – Economist Rafael R. Guthmann has posited that India's manufacturing output could be comparable to that of the United States by 2030, a forecast that suggests a significant rebalancing of global industrial power. Guthmann, known for his work in institutional economics and economic development, stated on social media that while the China/US manufacturing ratio of 4 by 2030 appears accurate, the scale of Indian manufacturing is currently underestimated.
"But Indian manufacturing will be in real terms comparable to the US's by 2030. A ratio of 11%/3% far underestimates the scale of Indian manufacturing even today," Guthmann tweeted. He further noted that his assessment is based on "physical data for 10 industries and weighting it by international prices yields the following manufacturing shares for 2023."
This perspective contrasts with some broader reports, which indicate India's current global manufacturing share is around 2.8% to 3.2%, significantly lower than China's 29% in 2023. Projections suggest China's share could rise to 45% by 2030, while the US's share is expected to fall to approximately 11% by the same year. India's growth is largely fueled by government initiatives like the Production Linked Incentive (PLI) schemes, attracting investments, particularly in electronics and automotive sectors.
The Economic Survey 2024-25 acknowledged India's 2.8% share of global manufacturing but emphasized its increasing trajectory. India has seen a remarkable hundred-fold increase in smartphone exports, reaching over $14 billion in 2023, driven by significant investments from companies like Apple and Samsung. This growth aligns with the broader trend of manufacturing diversification away from China, with countries like Vietnam and India emerging as competitive destinations.
While China remains the dominant manufacturing force, its share of global manufacturing value-added reached $4.66 trillion in 2023, exceeding the next four largest economies combined. However, the strategic shift by some companies to diversify supply chains, partly due to US-China trade tensions, presents a substantial opportunity for India. The country's economic outlook is promising, with projections of strong GDP growth through 2030, driven by robust demand and supportive policies.