The global economy is at a crucial tipping point. The western world is heading into an economic recession and the cost of living has been steadily rising in developed nations like the UK. On the other hand, China is experiencing difficulties with the outbreak of a new variant of COVID-19. The geopolitical scenario internationally stands divided over the Russia-Ukraine war.
In these circumstances, as governments work hard to take measures to keep the economy moving, India’s economy stands out. It is an interesting economy. It has a certain unpredictability to it that isn’t found in other parts of the world. In my previous article, “Shaping The Next Chapter Of The Indian Economy With Composites”, I elaborated on how India is growing in today’s world. As an Indian and a veteran entrepreneur, I continue to dive deeper through historic data and economic forecasts. This guides my analysis and opinion. In the second article of the “An Indian Vantage Point” series, I will be discussing in-depth how the Composites industry could be a catalyst for further economic growth and innovation in India.
Why is the Indian economy resilient?
If you look at the Eurozone carefully, you can clearly see that the continent is struggling economically. Inflation, according to the European Central Bank, has touched 9.1% for the EU (European Union). Fuel prices have gone up since most European countries are cutting ties with Russia due to the war. Add to that, the stagnation in most sectors and what you have are a deep recession and a gloomy 2023.
The USA is not very different from Europe. The official government sources in America, refuse to use the term “recession” based on technicalities. Unfortunately, the ground reality is that the economy is suffering. But the good news is that the Federal Reserve is taking strong measures to reverse the recession and push some positive GDP growth in the upcoming quarters.
China, the dragon, that implemented the Zero COVID norms, is in deep trouble. The new COVID variant has wreaked havoc in the mainland and it is estimated that millions more Chinese citizens will be affected during 2023. This means the supply chain and the consumption both will be negatively affected.
On this background, one can analyze the Indian economy. Leading economists have forecasted a GDP growth rate of 6.9% for 2023. It is one of the few economies that is resilient in a very negative economic atmosphere. Our economy is recovering from a pandemic and yet it continues to grow due to some basic reasons.
- The Consumption Economy phenomenon – The Indian economy for a very long time has been more of a consumption economy due to its humongous market size and growing needs. This works in our favor now, because our products can be consumed by our local market itself.
- Early adaptation of Digitization – Indians everywhere have adapted to a digitized and more connected world. Our banking systems have been updated, our app market has grown and mostly everyone is using a smartphone at the very least.
- “Make In India” push – The Central government’s push for “Make In India” in the pre-pandemic years has come in handy in the post-pandemic years. The economy is more self-reliant, more self-assured, and more innovative.
- Strong Foreign Policy – The Indian foreign policy in the past decade has been strong and more outward looking. So when countries are looking for a “China plus 1 option” they are most likely to pick India as their economy.
Moving ahead, I want to focus on the role of Composites in India and the world. Are Composites a disruptor or a game changer for the manufacturing sector as a whole? I personally believe that it is a “Catalyst” – a catalyst for a brighter future, a fast-growing economy, and more synergy.
Composites – The Catalyst Industry
The composites industry is a catalyst in the Indian economy. Its presence spans many industries and it is at the forefront of many green energy revolution sectors. This makes it a positive growth driver for the nation as a whole. The composites industry innovates on a large scale through its materials and applications.
For example in the wind energy sector, composites supply wind rotor blades among other parts. In the Electric Vehicle industry, composites are the most preferred material since the aim of EVs is to lower the body weight of the automobile. The same logic applies to the conventional automotive, aerospace, and marine industries as well.
I would like to highlight the role played by Composites in the EV industry. The EV industry consists of two-wheelers, four-wheelers, buses, electric-powered metro coaches, and so on. In each of these EVs, composites are used on a large scale. They are durable, flexible in nature, and cost-efficient as well.
The role of composites doesn’t end here, it has now expanded into the defense sector as well. Composites are lightweight, resistant to corrosion, and have the ability to retain their characteristics even in adverse natural conditions. Hence, you will find the defense sector making helmets, protective clothing, landing systems in aircraft, etc from composites.
Furthermore, the construction industry has also adopted composites as one of its own. The typical practice of REBAR where the steel rods are reinforced with concrete is slowly being replaced with GFRP (Glass Fibre Reinforced Polymer) for better results.
The composites industry globally has reached a stage of refinement when it comes to creating construction materials. High-strength FRP is used in building bridges, roofs, towers, pipes, tanks, etc. for making sound structures that are useful, long-lasting, and effective.
India too is witnessing the rise in the usage of composite materials in construction and infrastructure projects. Architects, civil engineers, and builders have increased their consumption of composites in the past few years. FRP is a great choice even for home decor. The market is flooded with a variety of aesthetic FRP home decor pieces.
The natural course of action as time marches on is to watch composites replace traditional materials like wood, steel, iron, and aluminum. This means there is less exploitation of non-renewable natural resources.
Another important sector where composites are now an integral part of the making and manufacturing process is the electronics and telecommunications sector. One can easily identify FRP materials in devices, appliances, and even the telecommunication infrastructure in the world. The use of FRP materials in electronics has proven beneficial for both the makers and the end consumers.
Let’s take a look at the impact of Composites on the Indian industry as a whole.
The Impact Of Composites On The Indian Economy
Any industrial sector in the world is considered to be a positive contributor and growth driver if it qualifies some fundamental criteria such as –
- Synergy with other industries
- Employment generation
- Export contribution
Composites excel in all these three criteria. It has outstanding synergy with multiple industries like construction, electronics and telecommunication, infrastructure development, automotive, aerospace, marine, defense, EV, sports, and many more. It plays a complementary role in building up these sectors like a brother.
When it comes to employment generation, composites have been steadily employing a sizable number of skilled workers and professionals. In India, the success and growth story of composites is directly related to the amount of employment it has been generating. While the government of India has not created any composite-specific incentives, entrepreneurs from our industry are free to capitalize on the general PLIs (Production Linked Incentives) of the government. I have seen many leading corporations invest in Composites and take advantage of such PLIs regularly. Apart from this one can also chart the involvement of FDI (Foreign Direct Investment) in growing our sector. Global corporations no longer hesitate to invest in India and India’s rising composites sector.
Finally, are we contributing to the exports of our nation? Yes. Although the percentage of exports by Composites is currently not very high, we are showing growth as the industry stabilizes and matures in India. Indian scientists and engineers should look at composites as the “industry of opportunities”. They should build a forward-looking, out-of-the-box thinking, innovative R&D (Research & Development) team to make more applications from FRP materials and export them to mature markets like Europe, Australia, and North America.
“Rome wasn’t built in a day” goes an old English proverb and that is so true when it comes to the growth of our Composites industry! As a business analyst and an industry insider, I have clearly witnessed the shift in people’s attitudes toward composites. In the past few years, their approach towards composites has swung from looking at us as an alternative or off-beat solution maker to turning towards us for real, cost-effective, durable solutions for every sector. This shows us the growing power of composites in both developed and developing economies. I truly believe that composites are a “sunrise sector” which has yet to peak. The more innovative we become, the faster we will grow!