India’s Journey Towards A Manufacturing Nation

Source: PIB
GS III: Indian Economy – Effects of Liberalization on the Economy, Changes in Industrial Policy and their effects on industrial growth, Infrastructure and Investment Models.

Why in the News?

The Make In India initiative completed 12 years on 25 September 2026.

News in Brief

• Launched in 2014, the initiative aims to transform India into a global manufacturing, design and innovation hub by promoting investment, strengthening domestic production and developing industrial capabilities.
• India has expanded manufacturing across electronics, automobiles, pharmaceuticals, steel, railways and defence, while increasingly developing domestic capabilities in components, machinery and advanced technologies.
• Recent initiatives such as PLI schemes, Semicon 2.0, BHAVYA and the Mobile Phone Manufacturing Scheme seek to expand production, deepen domestic value addition and strengthen industrial supply chains.

Make In India

• On 25 September 2014, ‘Make in India’ was launched with the ambition of becoming a global hub for manufacturing, design and innovation.
• The initiative focused on facilitating investment, fostering innovation and developing world-class infrastructure.
• Guided by ‘Minimum Government, Maximum Governance’, it has also sought to modernise processes and policies.
• The initiative has subsequently been expanded under Make in India 2.0.
• The initiative now focuses on 27 sectors, which include 15 in manufacturing and 12 in services.

Growth of India’s Manufacturing Sector

• India’s manufacturing sector has expanded in terms of production, investment and industrial capacity.
  • Manufacturing GVA recorded a CAGR of 10.88% between 2022-23 and 2025-26.
  • The manufacturing component of the Index of Industrial Production (IIP) registered 7% growth during April–July 2026.
  • Electronics production increased from approximately ₹1.9 lakh crore in 2014-15 to ₹13.11 lakh crore in 2025-26, recording 15.8% growth in the latest financial year.
  • Mobile phone production rose from approximately ₹18,000 crore to ₹6.27 lakh crore during the same period. India is now the world’s second-largest mobile phone manufacturer by volume.
  • Automobile production reached 31.03 million vehicles in 2024-25, reflecting the expansion of domestic automobile manufacturing.
  • Crude steel production increased from 81.7 million tonnes in 2014-15 to 170 million tonnes in 2025-26.
• India is now the world’s second-largest mobile phone manufacturing by volume.
• Electronics production also recorded 15.8% growth in 2025-26 over the previous year.

Expansion across major manufacturing industries

• Automobiles
  • India has strengthened its automobile manufacturing capacity, with growth across passenger vehicles, three-wheelers and two=wheelers.
• Pharmaceuticals and Medical devices
  • India is a major global pharmaceutical producer, with a strong position in generic mediciens.
  • Domestic medical device manufacturing has expanded, supporting efforts to reduceimport dependence and strengthen halthcare manufacturing.
• Steel
  • India has expanded its steel production capacity, supporting infrastructure development, construction and industrial growth.
• Railways
  • Indian Railways has strengthened domestic manufacturing of coaches and locomotives.
  • Increased production of Linke Hofmann Busch (LHB) coaches supports railway modernization and passenger safety.
• Defence
  • Indigenous defence production has expanded, reflecting greater emphasis on domestic manufacturing and self-reliance.
  • The growth of domestic defence industries supports reduced import dependence and strengthens India’s defence industrial base.

Deepening Domestic Manufacturing Capabilities

Make in India is increasingly focusing on developing domestic capabilities in components, machinery, materials and advanced technologies, rather than relying only on the assembly of finished products.

• Space Technology
  • ISRO and the Semiconductor Laboratory developed VIKRAM3201 and KALPANA3201 microprocessors for space applications.
  • VIKRAM3201 is the first fully indigenous microprocessor qualified for launch vehicle conditions.
• Solar Energy
  • India has expanded its domestic solar module and solar-cell manufacturing capabilities.
  • This supports renewable energy development and reduces dependence on imported solar components.
• Electric Vehicles
  • An indigenous drive system integrating a motor and inverter has been developed for electric vehicles.
  • The technology supports domestic EV manufacturing and is ready for commercialization.
• Aircraft manufacturing
  • HAL has expanded its LCA Tejas Mk1A production facilities.
  • Additional production facilities for the HTT-40 trainer aircraft are strengthening indigenous aircraft manufacturing.
• Railway Components
  • Rail Wheel Factory manufactures railway wheels, axles and wheelsets domestically.
  • Indigenous component manufacturing supports railway modernization and reduces dependence on imported components.
• Nuclear Components
  • The Nuclear Fuel Complex manufactures steam-generator tubes for India’s upcoming nuclear reactors.
  • Domestic production of specialized nuclear components strengthens indigenous nuclear technology and supports energy security.

Strategic Materials and Advanced Products

• Rare-Earth Magnets
  • A pilot plant for Neodymium-Iron-Boron permanent magnets has been established at ARCI, Hyderabad.
  • These magnets are important for electric vehicles, renewable energy systems, electronics and advanced manufacturing.
• Pharmaceuticals
  • India has developed advanced pharmaceutical products, including Trastuzumab Emtansine, Docaravimab-Miromavimab, Miqnaf and Desidustat.
  • These developments reflect growing domestic capabilities in complex drug development and manufacturing

Growth of Capital Goods and Heavy Engineering

• Capital goods are machinery and equipment used to manufacture other goods.
• Their domestic production is essential for reducing dependence on imported industrial machinery and strengthening India’s manufacturing ecosystem.
• Production across capital goods and heavy engineering has expanded significantly, reflecting the growing capacity of domestic industries.

Major Reforms Supporting Make In India

• Foreign Direct Investment (FDI)
  • India permits foreign investment through the automatic route in most sectors, subject to restrictions in certain strategic sectors.
  • FDI reforms have supported foreign investment, technology transfer and industrial development.
• National Single Window System (NSWS)
  • Provides a common digital platform for businesses to identify and apply for government approvals.
  • Integrates Central and State-level approval processes to simplify business operations and improve ease of doing business.
• India Industrial Land Bank (IILB)
  • A GIS-enabled platform providing information on industrial land, infrastructure and available facilities.
  • Helps investors identify suitable locations for setting up manufacturing units.
• PM GatiShakti National Master Plan
  • Launched to improve coordinated infrastructure planning among Central ministries, departments and States and Union Territories.
  • Uses geospatial data, satellite imagery and digital integration to support infrastructure planning.
  • Aims to improve multimodal connectivity, reduce logistics costs and address infrastructure gaps.
• Production Linked Incentive (PLI) Scheme
  • Provide incentives to encourage incremental manufacturing and sales across identified sectors.
  • Aim to attract investment, expand domestic production, promote exports and generate employment.
  • Support domestic manufacturing and strengthen India’s integration into global value chains.
• Startup India
  • Launched to promote innovation, entrepreneurship and investment.
  • Supports startups through recognition, funding-related assistance and a conducive business environment.
  • Encourages innovation, job creation and the development of new technologies.

Recent Initiatives to Strengthen Manufacturing

• Production Linked Incentive Scheme for Specialty Steel (PLI 1.2 (Third round launched in November 2025) 
  • The scheme promotes the domestic production of advanced and specialised steel products.
  • The latest round covers super alloys, CRGO steel, stainless steel products, titanium alloys and coated steels.
• Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets
  • Aims to establish integrated domestic manufacturing of sintered NdFeB-type rare-earth permanent magnets.
  • Supports electric vehicles, renewable energy, electronics and strategic industries.
• Bharat Audyogik Vikas Yojana (BHAVYA)
  • Aims to develop investment-ready, world-class industrial parks with integrated infrastructure.
  • Supports industrial expansion, investment and employment generation.
• Mobile Phone Manufacturing Scheme (MPMS)
  • Aims to scale up mobile phone production and deepen domestic value addition.
  • Focuses on strengthening supply-chain resilience and enhancing India’s global competitiveness.
• Semicon 2.0
  • Provides long-term support for developing India’s semiconductor ecosystem.
  • Covers chip design, manufacturing, advanced packaging, materials, equipment, research and talent development.
• Bharat Audyogik Vikas Yojana Rasayan (BHAVYA Rasayan)
  • Aims to facilitate the establishment of dedicated chemical parks in India.
  • Supports domestic chemical manufacturing industrial infrastructure and reduced import dependence.

Significance of Make in India

• Employment generation– Expansion of manufacturing can create jobs in factories, logistics, construction and supporting services.
• Import substitution- Domestic production of components, machinery, semiconductors and strategic materials can reduce dependence on imports.
• Export promotion- Increased manufacturing capacity can support exports and improve India’s integration into global value chains.
• Technological development– Indigenous capabilities in electronics, defence, pharmaceuticals and advanced materials can strengthen domestic research and innovation.
• Regional development- Industrial parks and improved connectivity can support investment and economic activity across different regions.
• Economic resilience– Diversified domestic supply chains can help address disruptions in international trade and production networks.

Challenges

The expansion of production, investment and manufacturing capacity alone do not establish that all structural challenges in Indian manufacturing have been resolved.

• Import dependence- Domestic assembly and production do not automatically imply complete domestic value addition, particularly where components and machinery are imported.
• Employment intensity- Growth in manufacturing output needs to be accompanied by adequate formal employment, skill development and better working conditions.
• MSME integration– Small enterprises require access to affordable credit, technology, infrastructure and large industrial supply chains.
• Research and innovation- Sustained investment in R&D, design and technology is necessary to move towards higher-value manufacturing.
• Infrastructure and logistics- Reliable power, transport, industrial land and efficient logistics remain important for manufacturing competitiveness.
• Environmental sustainability- Industrial expansion must be balanced with energy efficiency, resource conservation, pollution control and circular-economy practices.

Way Forward and Conclusion

As Make in India completes twelve years, its focus is expanding from increasing production to developing the domestic capabilities, technology and industrial ecosystems needed for long-term manufacturing growth.

Sustained progress will depend on translating investment and production growth into higher domestic value addition, productive employment, technological innovation and stronger participation in global value chains. This will be important for achieving the broader objective of Viksit Bharat 2047.

UPSC Prelims and Mains Practice Question

With reference to the Make in India initiative, consider the following statements:

1. Make in India was launched in 2014 to promote India as a global manufacturing, design and innovation hub.
2. Make in India 2.0 covers 27 sectors, including 15 manufacturing sectors and 12 service sectors.
3. The Production Linked Incentive schemes cover only the electronics and automobile sectors.

Which of the statements given above is/are correct?

(a) 1 and 2 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1, 2 and 3

Answer: (a) 1 and 2 only.

Mains Practice Question

Q) Make in India has evolved from promoting domestic production to developing integrated manufacturing capabilities and strategic technologies. Examine its achievements and the challenges that need to be addressed to make India a globally competitive manufacturing hub. (250 Words)

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