The New India – Manufacturing: A More Durable Path to Scale

Research evidence excerpt

The New India – Manufacturing: A More Durable Path to Scale

Asia Pacific InsightM

Executive Summary

What we lay out in this report

• The policy architecture that has been enacted

• An assessment of how manufacturing has evolved

• Disaggregation of sector performance across themes

• Benchmarking India against global peers on productivity and infrastructure

indicators

• Identifying the engines of growth for the next decade

• A forward-looking agenda to raise competitiveness

A decade of intent, an unfinished transition

The "Make in India" theme has been in place for roughly a decade, yet manufacturing's

share of GDP has moved little—around 15%—and India still supplies only about 1.8% of

global merchandise exports. The policy response has broadened from headline incentives

to a wider toolkit: Production Linked Incentive (PLI) schemes for priority sectors, a lower

corporate tax rate, sustained infrastructure spending, and logistics reform.

The gap between intent and outcome reflects certain known frictions such as high

delivered costs, thin domestic supplier bases, and limited plug-in to global value chains.

A changing sector mix

The more important change is in the mix of manufacturing even as manufacturing share

remains largely steady. Within manufacturing, output and investment are rotating towards

higher value-added, more capital- and technology-intensive activity.

Electronics, semiconductors, defence equipment, renewable-energy hardware, specialty

chemicals, and machinery are taking a larger share. Traditional/labour-intensive segments

have stagnated.

Based on our framework to assess sectoral trends ( Sector analysis methodology ),

chemicals, base and fabricated metals, and refined petroleum remain the structural

anchors.