Reigniting the Engine: How India's Manufacturing Sector is Fueling the 'Make in India' Revival
India's manufacturing sector is witnessing a strong revival under the 'Make in India' initiative. Explore how policy reforms, global shifts, and domestic innovation are powering the resurgence.
NewsSutra
India’s manufacturing sector is undergoing a transformational resurgence, and it's not by chance. The ‘Make in India’ initiative—once critiqued for slow momentum—has found fresh life in 2024-25, backed by a potent mix of government reforms, global supply chain realignments, and emerging technology adoption.
As the world looks for alternatives to China in the post-pandemic era, India is positioning itself as a credible, competitive manufacturing hub. The numbers and investments tell a story of ambition meeting execution.
Manufacturing Grows 9.2% in FY25: A Clear Upturn
India’s manufacturing sector expanded by 9.2% in FY25, a significant leap from the 4.3% growth recorded the previous year, according to the Ministry of Statistics and Programme Implementation (MoSPI). This growth is a key driver of the nation’s 7.8% GDP expansion in Q4 FY25.
Behind these numbers lies a deep structural shift: a renewed focus on local value addition, ease of doing business, and targeted industrial incentives.
Production Linked Incentive (PLI) Scheme: The Catalyst
The PLI Scheme, rolled out in 13 key sectors—from mobile phones and pharmaceuticals to semiconductors and textiles—has emerged as the backbone of India’s industrial revival.
As per data from Invest India, PLI approvals have attracted over ₹3.8 lakh crore in committed investments, with companies like Apple, Samsung, Foxconn, Tata Electronics, and Dixon Technologies expanding their manufacturing bases.
The PLI for IT hardware, in particular, is gaining traction. India's share in global smartphone manufacturing rose from 9% in 2016 to over 19% in 2024, as per ICEA, establishing India as a serious electronics manufacturing destination.
Focus on Infrastructure & Logistics
A revival in manufacturing is incomplete without robust infrastructure. The PM Gati Shakti National Master Plan, launched in 2021, is now being widely credited for synchronizing multi-modal connectivity and reducing logistics costs.
The government’s capital expenditure on infrastructure hit a record ₹11.11 lakh crore in FY25, as reported by the Ministry of Finance. Dedicated freight corridors, upgraded ports, and integrated logistics parks are enabling faster movement of goods and raw materials.
The National Logistics Policy, aimed at bringing India’s logistics costs down to 8% of GDP (from 13-14% currently), is also making headway, particularly through digitization and real-time tracking systems.
FDI Confidence: Global Giants Bet on India
India received $84 billion in FDI inflows in FY25, the highest ever, with manufacturing attracting over 23% of that, according to the Department for Promotion of Industry and Internal Trade (DPIIT).
Several global corporations are adopting a “China +1” strategy, and India is reaping the benefits:
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Micron Technology has begun constructing its ₹22,500 crore semiconductor facility in Gujarat.
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Tesla is reportedly finalizing plans for a gigafactory in Maharashtra or Gujarat.
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General Electric and Hindustan Aeronautics Limited (HAL) are collaborating to co-manufacture fighter jet engines.
These moves signal growing confidence in India’s manufacturing ecosystem and long-term geopolitical stability.
MSMEs and Domestic Manufacturing Backbone
The revival isn’t just top-heavy. India’s 63 million MSMEs—which contribute nearly 30% of the GDP—are playing a pivotal role in localized production and job creation. New policies under the Udyam Registration Portal and financial assistance through the Credit Guarantee Scheme for MSMEs are ensuring they benefit from this manufacturing momentum.
Digital platforms like GeM (Government e-Marketplace) are enabling MSMEs to participate directly in government procurement, bringing transparency and scale to local producers.
High-Tech Manufacturing & Skill Development
India is making inroads into high-tech manufacturing—sectors historically dominated by East Asia. Initiatives like the Semicon India Programme are pushing India toward chip manufacturing, while defense production is being indigenized rapidly under the Atmanirbhar Bharat Abhiyan.
Meanwhile, the Skill India Mission and partnerships with companies like Siemens, Bosch, and Toyota are addressing the industry-academia gap. Vocational training is being aligned with industry 4.0 requirements like automation, AI, and robotics.
State-Level Leadership: Gujarat, Tamil Nadu, UP in the Lead
Manufacturing progress is increasingly being driven at the state level. For example:
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Gujarat leads in chemicals and electronics, with well-established industrial corridors.
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Tamil Nadu has become the EV manufacturing capital, hosting Ola Electric, Hyundai, and Ather Energy plants.
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Uttar Pradesh has seen a 250% rise in manufacturing FDI proposals in the last two years, thanks to policy liberalization and industrial park development.
State Industrial Promotion Boards are playing a key role in reducing bureaucratic red tape and facilitating smoother project execution.
Challenges Ahead: Execution, Compliance, and Inclusivity
While the trajectory is promising, challenges persist. Land acquisition delays, regulatory bottlenecks, and labor law inconsistencies in some states continue to hamper speed. Environmental clearances and ESG compliance norms are evolving but need streamlined frameworks.
Moreover, ensuring that women and marginalized communities are equitably included in this industrial growth remains an ongoing task. Bridging the digital and skills divide across rural belts will be crucial for sustained impact.
Conclusion: A Manufacturing Moment Worth Seizing
India's manufacturing revival under ‘Make in India’ is no longer a slogan—it is a tangible economic movement backed by investment, policy, and global strategy. The resurgence has the potential to redefine India’s role in global supply chains, reduce import dependence, and create millions of quality jobs over the next decade.
To capitalize fully, India must now shift from policy announcements to consistent on-ground execution, balance speed with sustainability, and focus on inclusive growth.
As the global manufacturing landscape resets, India’s window of opportunity is wide open—but it won't stay open forever.
