Exam Relevance

• UPSC GS-II: Government Policies and Interventions | Policy Implementation | Centre–State Coordination
• UPSC GS-III: Industrial Policy | Growth and Employment | Investment | Infrastructure | Indigenisation of Technology
• Prelims: Make in India | PLI Schemes | GVA | IIP | GFCF | PM GatiShakti

Why in News?

Make in India completed 12 years on 25 September 2026. Launched in 2014, the initiative aims to establish India as a global centre for manufacturing, design and innovation.

The anniversary provides an opportunity to assess both the expansion of industrial capabilities and continuing challenges in employment, private investment, domestic value addition and export competitiveness.

What is Make in India?

• About: Make in India is an umbrella initiative to encourage investment, strengthen industrial infrastructure, promote innovation and improve the business environment.
• Core objectives: Expand manufacturing capacity, generate productive employment, develop technological capabilities and integrate Indian enterprises into global value chains.
• Expanded coverage: Make in India 2.0 covers 27 sectors—15 manufacturing and 12 services sectors.
• Policy approach: Its implementation involves multiple ministries, state governments, investors and industrial enterprises. It is broader than any individual subsidy programme.

Why is Manufacturing Important for India?

• Structural transformation: Manufacturing can help workers move from low-productivity activities into more productive and better-paying employment.
• Employment generation: Labour-intensive industries can create opportunities for young people, women and workers transitioning from agriculture.
• Economic linkages: Industrial growth supports transportation, warehousing, finance, design, maintenance and other services.
• Export diversification: Competitive manufacturing can widen India’s export basket and strengthen foreign-exchange earnings.
• Strategic autonomy: Domestic capabilities in defence, semiconductors, pharmaceuticals and energy equipment reduce vulnerability to external disruptions.
• Regional development: Industrial clusters can support local suppliers, infrastructure and urban development when accompanied by effective planning.

What Have Been the Major Achievements?

1. Expansion of Manufacturing Output

Manufacturing GVA at constant prices recorded a 10.88% compound annual growth rate between 2022–23 and 2025–26, under the revised national accounts series.

The manufacturing component of the Index of Industrial Production grew by 7% during April–July 2026, compared with the corresponding period of 2025.

2. Growth Across Major Industries

These trends demonstrate the expansion of domestic production capacity across consumer and strategic industries.

Other achievements include 31.03 million vehicles produced in 2024–25, pharmaceutical turnover of ₹5,08,630 crore in 2025–26, and crude steel production of 170 million tonnes in 2025–26.

Analytical significance: Sectoral production gains should also be assessed against domestic value addition, productivity and employment. Higher sales alone do not establish the extent of technological self-reliance.

3. Development of Strategic Capabilities

The manufacturing agenda increasingly includes components, materials and advanced technologies.

Examples include semiconductor manufacturing, indigenous space electronics, solar equipment and rare-earth permanent magnets. These capabilities matter because dependence on imported intermediate inputs can persist even when final products are assembled domestically.

Which Initiatives Support the Manufacturing Ecosystem?

The policy emphasis is increasingly shifting towards complete domestic supply chains and industrial infrastructure.

Updated PLI Performance

The September 2026 PIB backgrounder reports that, as of June 2026, the 14 PLI schemes had attracted approximately:

• ₹2.6 lakh crore in investment
• ₹23.8 lakh crore in production and sales
• Over ₹15.5 lakh crore in exports
• 14.6 lakh jobs

These are updated figures compared with the lower totals in the supplied draft.

For examination purposes: Production, investment and exports are different indicators. Export sales form part of total sales and should not be added to them.

What Challenges Remain?

1. Limited Structural Change

Reported figures under the revised series show manufacturing’s share in total GVA increasing from 14.6% in 2022–23 to 15.6% in 2025–26.

This indicates improvement, but a relatively modest change in the economy’s overall composition. Strong growth in individual sectors has yet to produce a broad manufacturing-led transformation.

2. Uneven Distribution of Incentive Benefits

An assessment using March 2026 investment data found that approximately 83% of PLI investment was concentrated in five sectors: solar modules, pharmaceuticals, automobiles and components, speciality steel, and large-scale electronics.

The challenge is to extend industrial gains to smaller enterprises and a wider range of industries.

3. Private Investment and Export Competitiveness

Recent assessments highlight weak private fixed-investment trends and limited improvement in India’s global merchandise export share, despite rising export values.

Investment decisions depend on expected demand, financing costs, infrastructure, regulatory predictability and access to markets. Incentives alone cannot address all these factors.

4. Domestic Value Addition

Assembly operations may continue to rely on imported components, machinery and technology.

India needs stronger capabilities in product design, tooling, precision engineering, materials, research and intellectual property to capture more value within the country.

5. Employment and Skill Gaps

Capital-intensive production can expand rapidly without generating proportionate employment.

Industrial policy must therefore balance advanced manufacturing with labour-intensive sectors and improve apprenticeships, technical training and workplace conditions.

6. MSME and Environmental Constraints

Small enterprises face difficulties in accessing affordable credit, technology, testing facilities and large procurement networks.

Industrial expansion also requires effective management of water demand, emissions, hazardous waste and land-use pressures.

What is the Relevance for Himachal Pradesh?

Himachal Pradesh offers an important example of industrial development within a mountain economy.

Industrial Opportunities

• Pharmaceutical ecosystem: The Baddi–Barotiwala–Nalagarh belt provides a base for pharmaceuticals and associated manufacturing.
• Industrial infrastructure: The Bulk Drug Park at Una and Medical Devices Park in Solan are relevant to strengthening pharmaceutical and medical-technology value chains.
• Agro-processing: Horticultural produce creates opportunities for processing, packaging, cold storage and higher-value products.
• Local enterprises: Handicrafts and other specialised products can benefit from improved design, quality certification and market access. The state’s Economic Survey identifies pharmaceuticals, medical devices and agro-processing among its industrial activities and opportunities.

Priorities for the State

Himachal Pradesh should connect industrial growth with local skills, reliable transport, resilient infrastructure and environmental safeguards.

Cleaner production, common effluent-treatment facilities and careful industrial siting are particularly relevant in a fragile Himalayan environment. Development of smaller processing enterprises can also spread benefits beyond established industrial belts.

What Should Be the Way Forward?

• Deepen domestic value chains: Support component suppliers, industrial machinery, materials and indigenous design.
• Strengthen MSMEs: Improve access to finance, timely payments, shared testing facilities and technology.
• Promote employment-intensive industries: Expand opportunities in textiles, footwear, food processing and other labour-absorbing activities.
• Encourage innovation: Connect research institutions with industry and support commercialisation of useful technologies.
• Improve logistics and predictability: Ensure reliable infrastructure, efficient customs processes and stable regulatory procedures.
• Build global competitiveness: Combine export-market access with quality standards, reliable delivery and competitive input costs.
• Evaluate incentives carefully: Assess additional investment, domestic value addition, durable employment and productivity.
• Adopt state-specific strategies: Align industrial development with local resources, skills, infrastructure and ecological limits.

Key Concepts for Prelims

Remember: Nominal production growth differs from real growth; manufacturing capacity differs from actual output; and manufacturing’s share in GVA differs from its share in GDP. Comparisons must use consistent definitions and statistical series.

Mains Practice Question:

“Sectoral manufacturing achievements do not necessarily translate into economy-wide structural transformation.” Examine this statement in the context of twelve years of Make in India. (250 words)