Make in India at 12 – Manufacturing Growth, Achievements and Challenges

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• Make in India, launched on 25 September 2014, has completed 12 years amid significant gains in manufacturing capacity but continuing challenges in investment, exports and the sector’s overall economic contribution.

Make in India: Objectives and Evolution

• Make in India was launched to position India as a global hub for manufacturing, design and innovation. 
• Its initial focus was on facilitating investment, fostering innovation, developing infrastructure and improving business processes.
• The initiative was later expanded under Make in India 2.0, which covers 27 sectors, including 15 manufacturing and 12 services sectors. 
• The manufacturing ecosystem has also been supported by initiatives such as the Production Linked Incentive (PLI) schemes, National Single Window System (NSWS), PM GatiShakti and India Industrial Land Bank.

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Manufacturing Growth and Sectoral Gains

• Manufacturing GVA at constant prices recorded a 10.88% CAGR between 2022-23 and 2025-26 under the revised national accounts series.
•  The manufacturing component of the Index of Industrial Production also grew 7% during April-July 2026 compared with the corresponding period of 2025. 
• Several sectors have recorded substantial increases:
• Electronics
  • Electronics production increased nearly sevenfold, from approximately Rs. 1.9 lakh crore in 2014-15 to Rs. 13.11 lakh crore in 2025-26. 
  • Mobile-phone production increased around 33 times, from Rs. 18,000 crore to Rs. 6.27 lakh crore, making India the world’s second-largest mobile-phone manufacturer by volume. 
• Automobiles and Pharmaceuticals
  • Vehicle production reached 31.03 million units in 2024-25, around 33% higher than in 2014-15. 
  • India’s pharmaceutical industry recorded annual turnover of Rs. 4,71,898 crore in 2024-25, while domestic medical-device manufacturing increased from Rs. 28,000 crore in 2019-20 to Rs. 41,500 crore. 
• Steel and Defence
  • Crude steel production increased from 81.7 million tonnes in 2014-15 to 170 million tonnes in 2025-26. 
  • Indigenous defence production rose from Rs. 46,429 crore to Rs. 1.78 lakh crore over the same period. 
• Components and Strategic Technologies
  • Manufacturing capabilities are increasingly extending beyond finished goods. 
  • Solar-module manufacturing capacity rose from 2.3 GW in 2014 to 192 GW by June 2026, while solar-cell capacity increased from 1.2 GW to about 30 GW. 
  • India has also developed indigenous microprocessors for space applications and established a pilot facility for Nd-Fe-B rare-earth permanent magnets. 

Investment and PLI Schemes

• The 14 PLI schemes attracted Rs. 2.40 lakh crore in investment, generated more than Rs. 22.66 lakh crore in production and sales, supported over Rs. 15.20 lakh crore in exports and created more than 14 lakh jobs as of June 2026. 
• However, the gains are concentrated. Solar modules, pharmaceuticals, automobiles and components, speciality steel and large-scale electronics account for nearly 83% of PLI investment. 

Key Challenges

• The broader data presents a more mixed picture. Manufacturing has not materially increased its share of India’s economic output, employment or global exports over the period examined. 
• Under the revised national accounts, its share in GVA increased only marginally from 14.6% in 2022-23 to 15.6% in 2025-26. 
• Non-petroleum goods exports increased from $253.5 billion in 2014-15 to $388.3 billion in 2025-26, but India’s share of global merchandise exports remained around 1.7%, the same level as in 2013. 
• Private-sector GFCF as a share of GDP has declined in recent years. Manufacturing FDI has also grown more slowly than overall FDI in seven of the 12 years examined. 
• Capacity utilisation has improved but remains below the 80% level generally associated with fresh capacity creation. 

Recent Policy Push

• The next phase increasingly focuses on domestic value addition and strategic capabilities. 
• Semicon 2.0 has an allocation of Rs. 1,27,500 crore for semiconductor design, manufacturing, packaging, materials, equipment, research and talent. 
• BHAVYA has Rs. 33,660 crore for 100 investment-ready industrial parks, while Rs. 7,280 crore has been allocated for integrated manufacturing of sintered rare-earth permanent magnets. 

Way Forward

• India’s manufacturing strategy needs to move from increasing production to building competitive domestic value chains. 
• Greater private investment, stronger component ecosystems, higher capacity utilisation, technology development and deeper integration with global value chains will be important.

Conclusion

• Twelve years of Make in India have created significant manufacturing capabilities across electronics, automobiles, pharmaceuticals, steel, defence and strategic technologies. 
• However, the evidence also shows that these gains have not yet translated into a proportionate increase in manufacturing’s share of economic output, investment and global exports. 
• The next phase must therefore focus on broad-based and technology-intensive manufacturing growth.

Source: TH | PIB