India’s aim of becoming a $5 trillion economy will require atleast $1 trillion to come in from manufacturing, said Amrit Acharya, Co-founder and CEO of Zetwerk, addressing the role of manufacturing in driving Indian industry.
“India aspires to build a five trillion economy. That’s not possible if at least a trillion of that will not come from manufacturing. We are maybe halfway there and our vision really is to catalyse the Indian GDP to deliver $1 trillion of value in manufacturing,” Acharya said, speaking at TechSparks 2024.
Contract manufacturing company started out with a vision to build the largest steel fabricator in India. Today renewables is Zetwerk’s biggest business, bringing in 40% of the company’s revenue.
Acharya described Zetwerk’s model as a managed marketplace for manufacturing, where customers bring in designs and the company helps bring them to market in an “asset light model”.
Zetwerk is engaged in a variety of sectors, including manufacturing industrial goods such as wind turbine components, solar components, and bridges, aerospace and defense projects, among others.
Building for India, in India
While the company is India focussed, one-third of the company’s revenue comes from the US.
Speaking about global expansion, Srinath Ramakkrushnan, Co-founder, Zetwerk said it began during the Covid-19 lockdown, entirely by accident at first.
“A bunch of customers from the US started reaching us, giving us drawings and started placing inquiries, asking if they could get the part manufactured in India. And we were not taking it seriously and were putting in partial bandwidth,” he added.
However, the velocity of enquiries increased during the second wave of Covid, when Zetwerk realised the growing popularity of the China Plus One strategy.
The China Plus One strategy, also known as C+1 or Plus One, is a business strategy that involves companies diversifying their manufacturing and sourcing operations beyond China.
Upon further conversation with customers, Ramakkrushnan realised that all of them were first-time India buyers, or they had tried India as a manufacturer in the past, but failed.
“They needed a hassle free window and that’s what we did. And our business steadily grew and 2022 was an amazing year. We did 10x that year in revenue,” he said.
India levelling up with China
Ramakkrushnan believes that conditions are favourable for India’s manufacturing sector today.
“Whether it is America, or it is Europe, there are a lot of policy alignments towards India. In India, we have PLIs in electronics, which created 10x capacities just in the last five years. It needs to happen in several more sectors, not just in electronics,” he said.
He highlighted that India is doing a lot of assembly work in electronics today, which is creating employment for a lot of people, but there is a need to do high value work.
“Otherwise, my worry would be, we are going to be in that 25 percentile of manufacturing work, and we shouldn’t be satisfied. We should be hungry. We should grab more market share from what China is leaving today and other countries are leaving today,” he added.
The co-founders urged people to engage further with the manufacturing sector, be it in aerospace, defense or hardware segments.
Speaking about the scope of furthering the manufacturing economy, Acharya noted, “The world is a very volatile place today. It’s dynamic, but in every volatility, there is opportunity, and that would be my big message for anyone trying to build a business today, that every sector is going through both ups and downs, and if you can navigate those, well, there’s a lot of opportunity in it.”
