Make in India: From Investment Promotion to Deep Domestic Manufacturing

Context

Launched on 25 September 2014, Make in India was conceived to position India as a global hub for manufacturing, design and innovation. Over twelve years, the initiative has expanded into a broader industrial strategy covering 27 sectors, supported by investment reforms, infrastructure development, PLI incentives and efforts to strengthen domestic capabilities.

Make in India has coincided with significant expansion in several manufacturing segments. Manufacturing GVA at constant prices recorded a CAGR of 10.88% between 2022–23 and 2025–26, while manufacturing output under the IIP grew 7% during April–July 2026 over the corresponding period of 2025.

Expansion across major sectors

The electronics industry has witnessed particularly rapid growth. Overall electronics production increased from ₹1.9 lakh crore in 2014–15 to ₹13.11 lakh crore in 2025–26. Mobile-phone production rose from ₹18,000 crore to ₹6.27 lakh crore, making India the world’s second-largest mobile-phone manufacturer by volume.

The automobile industry produced 31.03 million vehicles in 2024–25. Pharmaceutical manufacturing also expanded, with annual turnover reaching ₹4,71,898 crore, while domestic medical-device production increased from about ₹28,000 crore in 2019–20 to ₹41,500 crore in 2024–25.

India’s steel production more than doubled from 81.7 million tonnes in 2014–15 to 170 million tonnes in 2025–26. Defence production similarly increased from ₹46,429 crore to ₹1.78 lakh crore during the same period, reflecting a substantial rise in indigenous production.

Moving towards upstream capabilities

The manufacturing strategy is increasingly extending beyond finished products to strategic inputs and advanced technologies. India has developed biosimilars and novel therapeutic products, established pilot production of Nd-Fe-B rare-earth magnets and developed space-grade processors such as VIKRAM3201 and KALPANA3201.

Solar manufacturing capacity has also expanded sharply, from 2.3 GW in 2014 to 192 GW by June 2026. Production of capital goods and machinery has doubled since 2019–20, strengthening the industrial equipment base.

Policy and institutional support

Several reforms have created an enabling environment for manufacturing. Cumulative FDI reached $843 billion between 2014–15 and 2025–26, while the National Single Window System has integrated thousands of central and state-level approvals.

PM GatiShakti has helped coordinate infrastructure planning, while the India Industrial Land Bank provides information on industrial parks. Under PLI schemes covering 14 sectors, investment of ₹2.40 lakh crore has supported ₹22.66 lakh crore in production or sales, ₹15.20 lakh crore in exports and more than 14 lakh direct jobs by June 2026.

The startup ecosystem has also expanded, with more than 2.54 lakh startups recognised by September 2026.

New generation manufacturing initiatives

The next phase is increasingly focused on domestic value addition and technological depth. Semicon 2.0, with an outlay of ₹1,27,500 crore, seeks to support semiconductor fabrication, packaging, equipment, design and research.

The Mobile Phone Manufacturing Scheme has been allocated ₹62,500 crore to encourage domestic component production. BHAVYA provides ₹33,660 crore for 100 plug-and-play industrial parks, while BHAVYA-Rasayan focuses on dedicated chemical parks.

The Rare Earth Magnets Scheme and expanded PLI support for specialty steel are intended to strengthen strategic supply chains and reduce dependence on imported critical inputs.

The assembly and value-addition challenge

Despite the growth in manufacturing output, an important structural issue remains: high production does not automatically translate into high domestic value addition.

Several industries, particularly electronics, continue to depend substantially on imported components, sub-assemblies, integrated circuits and capital equipment. Consequently, rising assembly capacity can coexist with persistent import dependence.

Manufacturers also face relatively high industrial power costs, land-related regulatory constraints and logistics expenses in some regions. At the same time, converting breakthroughs from institutions such as ARCI, SCL and DRDO into commercially viable, large-scale private production remains difficult because deep-tech ventures require substantial long-term capital and specialised industrial capabilities.

Way Forward

• Shift incentives towards domestic value addition: Future industrial incentives can place greater emphasis on locally produced components, precision parts, machinery and design capabilities rather than only final output.
• Strengthen domestic supplier networks: MSMEs should be integrated more deeply into the tier-1 and tier-2 supply chains of electronics, defence, automobiles and other strategic industries.
• Improve industrial infrastructure: PM GatiShakti and new industrial parks should be used to reduce logistics costs, improve multimodal connectivity and provide reliable utilities.
• Bridge R&D and commercialisation: Greater collaboration among ANRF, research institutions, universities and deep-tech enterprises can help move indigenous technologies from laboratories to commercial production.
• Promote green manufacturing: Renewable energy, efficient industrial processes, recycling and cleaner freight systems can help Indian manufacturing remain competitive while reducing its environmental footprint.

Conclusion

Twelve years of Make in India have significantly expanded India’s manufacturing capacity and strengthened several strategic sectors. The next stage, however, requires moving from producing more finished goods to producing a greater share of the components, technologies, machinery and intellectual property embedded in them. This deeper value-chain integration will be crucial for building a resilient and globally competitive manufacturing ecosystem.

Source : PIB