India's Manufacturing Landscape

NITI Aayog’s Frontier Tech Hub, with CII and Deloitte, released “Reimagining Manufacturing”, a 10-year roadmap (2026–2035) for tech-driven industrial growth, aiming to raise manufacturing’s GDP share to 25% and make India a global manufacturing hub.

Current Manufacturing Landscape in India

GDP Share: Manufacturing contributes 17% to GDP. GVA rose 11.89% in 2023-24.
Employment Base: About 11.4% of India’s workforce is employed in manufacturing.
State Leaders: Gujarat leads with 17.22% of total output, followed by Maharashtra and Tamil Nadu.
Leading Subsectors: Basic metals, motor vehicles, and chemical products.
Export Share: Manufactured goods constitute 35.6% of total exports in 2024-25 and 67.1% of total merchandise exports.

NITI Aayog Roadmap

Strategic Vision: The report outlines a 10-year plan (2026-2035) to transform India’s manufacturing sector through technology integration and innovation.
Primary Goals: It aims to raise manufacturing’s GDP share to over 25% (from 17%) by 2035, create 100 million jobs, and position India among the top three global hubs.
Technology Scope: Thirteen high-impact sectors across five clusters are prioritised for adopting AI, ML, robotics, digital twins, and advanced materials.
- Five Clusters: Engineering, Consumer Products, Life Sciences, Electronics, and Chemicals.
Economic Risk: Delayed adoption of frontier technologies may cost India $270 billion by 2035 and $1 trillion by 2047 in potential GDP gains.
Policy Integration: It recommends including “Advanced Manufacturing” as a key pillar of the upcoming National Manufacturing Mission.

Key Enablers of Manufacturing in India

Policy Support: Make in India 2.0 and PLI schemes worth over ₹2 lakh crore promote local production and global investment.
Tech Adoption: Using AI, IoT, and robotics can boost manufacturing productivity by about 30% by 2035.
Infrastructure: PM Gati Shakti & industrial corridors aim to cut logistics costs to 8% of GDP by 2030.
MSME Growth: MSMEs, contributing 30% to GDP, are being linked to digital platforms like ONDC for wider market access.
Skill Building: Skill India 2.0 targets training 15 million youth in Industry 4.0 technologies by 2030.

Key Structural Challenges in India’s Manufacturing Transformation

GDP Gap: Manufacturing contributes just 17% to India’s GDP, far below East Asia’s 25-30% share during its industrial growth.
R&D Deficit: India invests less than 1% of its GDP in research and development, whereas China invests over 2%.
Qualitative Deficit: Skill shortages, weak 5G coverage, and limited smart industrial parks hinder automation and the adoption of advanced technologies.
Productivity Stagnation: India’s total factor productivity stands at 2.2%; to meet the 2035 targets, it must rise above 5.5%.
Regulatory Lag: Fragmented data policies and unclear technology standards obstruct long-term investments and digital industrialisation.

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Roadmap for Technology-Led Manufacturing Growth

Frontier Institute: Establish a Global Frontier Technology Institute for R&D coordination, certification, and technology transfer.
Smart Parks: Develop 20 plug-and-play industrial zones with 5G connectivity and testing infrastructure to attract investors.
Digital Backbone: Build a national industrial IoT framework for real-time data sharing, predictive maintenance, and operational efficiency.
Champion Model: Encourage large firms to mentor MSMEs through cluster-based innovation networks and shared digital platforms.
Service Transition: Support manufacturers in shifting from product-based to integrated service-oriented operations using AI and IoT systems.
State Missions: Launch state-specific skilling programs aligned with local industrial strengths, such as robotics in Tamil Nadu or green mobility in Maharashtra.

India’s manufacturing sector can be the engine of growth, creating jobs and enhancing global competitiveness. Guided by NITI Aayog’s Frontier Tech Hub as an “action tank,” India aims to become the “manufacturing hub of the world” with 25% GDP and inclusive growth by 2035.

Reference: PIB

PMF IAS Pathfinder for Mains – Question 398

Approach

Introduction: Write a contextual introduction for manufacturing in India and mention the current data and facts.
Body: Analyse the key enablers of the manufacturing sector, also mention critical bottlenecks to achieving this transformation, and the way forward.
Conclusion: Emphasis is on a unified approach to transform from a think tank to an action tank, driving technology-led industrial transformation.