India’s Manufacturing Renaissance: NMM, RDI, and the Road to 2047
India’s 2035 Manufacturing Renaissance:Why the National Manufacturing Mission (NMM) Will Succeed or Fail on RDI. A Sparrow Infinity & RMS Take.
Executive Summary
India’s manufacturing sector stands at a critical juncture, defined by a significant paradox: a robust performance in real, inflation-adjusted terms that is masked by a misleading decline in its nominal share of the national economy. This report provides an exhaustive analysis of this complex landscape, dissecting the statistical illusion, evaluating the government’s strategic response, and assessing the formidable challenges that lie ahead. While the sector’s contribution to Gross Value Added (GVA) has contracted from nearly 18% to below 14% in current prices over two decades, its share in constant prices has held steady at approximately 18%. This divergence is not a sign of de-industrialization but a symptom of muted pricing power and intense global competition, underscoring the urgent need to transition from a cost-based model to one centered on high-value, innovation-led growth.
In response, the Government of India has articulated a bold vision, primarily through the National Manufacturing Mission (NMM), which aims to elevate the sector’s share of Gross Domestic Product (GDP) to an ambitious 25% by 2035.1 This mission is backed by a planned ₹10,000 crore outlay, employing Viability Gap Funding (VGF) and a regionally-focused, cluster-based strategy to catalyze investment in sunrise sectors. However, this ambition is confronted by a gauntlet of critical headwinds. Domestically, deep-seated structural impediments, most notably the long-stalled reforms in land acquisition and labor laws, persist as the primary bottlenecks to industrial expansion. These are compounded by high logistics and power costs that erode competitiveness.
Geopolitically, India faces intense competition from China, whose state-driven industrial policy, exemplified by “Made in China 2025,” has established a dominant position in global value chains. Simultaneously, navigating complex trade relationships, particularly with the United States and its significant tariff barriers, remains a key external variable. Furthermore, a historically risk-averse private sector, long reliant on wage arbitrage, presents an internal cultural hurdle to the deep, long-term R&D investments required for a paradigm shift.
This report argues that India’s success is contingent upon a fundamental strategic pivot from seeking cost-competitiveness to achieving “strategic indispensability.” This requires creating technological choke points in critical global value chains, a strategy exemplified by firms like ASML, TSMC, and Arm.1 The government’s new institutional architecture, comprising the Anusandhan National Research Foundation (ANRF) and the ₹1-lakh crore Research, Development and Innovation (RDI) scheme, signals a crucial recognition of this imperative. Ultimately, realizing the vision of a $7.5 trillion manufacturing economy by 2047 will demand not just ambitious policy, but relentless execution, the political will to enact difficult structural reforms, and a transformative partnership with a revitalized, innovation-driven private sector.
Re-evaluating India's Manufacturing ⇲ Trajectory: Beyond the Nominal Decline
For years, a narrative of stagnation has clouded the perception of India’s manufacturing sector, fueled by headline statistics showing a declining share in the nation’s economy. This perspective, however, fails to capture the more nuanced and resilient reality of the sector’s performance. A deeper analysis reveals a critical divergence between nominal and real economic indicators, a paradox that reframes the central challenge from one of de-industrialization to a pressing need for enhanced value addition and competitive pricing power.
The Statistical Paradox
The primary source of concern stems from the sector’s shrinking contribution to India’s Gross Value Added (GVA) when measured at current market prices. Two decades ago, manufacturing accounted for nearly 18% of the country’s GVA. Today, that figure has slipped to below 14%. This downward trend is both puzzling and disheartening when juxtaposed with the national ambition of elevating manufacturing’s share in GDP to 25%.
However, this nominal decline tells only half the story. A crucial distinction emerges when examining the sector’s performance in real (constant price) terms. Stripping away the effects of inflation reveals that manufacturing’s share of the economy has not collapsed; instead, it has remained remarkably steady at approximately 18% over the same period. This stability is further corroborated by the sector’s consistent contribution to the country’s Gross Value of Output (GVO), which has held firm at around 38%, nearly identical to the services sector.1 The discrepancy between the robust GVO share and the lower GVA share is explained by the high degree of intermediate consumption in manufacturing; GVA measures the ‘net contribution’ after subtracting the cost of inputs, which are substantial in industrial processes. The core issue, therefore, is not a lack of output but the dynamics of pricing and value capture.
Unpacking the Price Deflator Effect
The chasm between the sector’s nominal and real performance is a direct consequence of relative price effects, a phenomenon captured by sectoral price deflators. The manufacturing sector has experienced significantly lower inflation compared to both agriculture and services, effectively suppressing its growth in current price terms.
This divergence has two primary causes. First, manufacturing is intrinsically linked to the global marketplace, characterized by intense competition, continuous pressure to adopt cost-cutting technologies, and consequently, narrower profit margins. This stands in stark contrast to other major sectors of the Indian economy. Agriculture, for instance, often benefits from government support mechanisms that see guaranteed annual price increases. Services, particularly in the domestic market, tend to enjoy greater pricing power. The data starkly illustrates this reality: by fiscal year 2024-25, the agricultural price deflator (current price GVA divided by constant price GVA) stood at 2.17 from a base year value of 1. In comparison, the deflator for manufacturing was just 1.41, while for services it was 1.75.
Second, as a result of these differential inflation rates, manufacturing’s relative price has eroded significantly over the past two decades. The ratio of the manufacturing sector’s deflator to the agricultural deflator fell from 1.29 in 2004-05 to a mere 0.65 by 2024-25, a decline of nearly half. Even when compared against services, the relative price slipped by a quarter, with the ratio falling to 0.81 by 2024-25.
Reframing the Narrative
The evidence overwhelmingly suggests that the narrative of a shrinking industrial base is a statistical illusion born of price effects. India is not de-industrializing; its factories are producing consistently. The real challenge lies elsewhere. The significant gap between the price deflators of manufacturing and other sectors is a quantitative symptom of a deeper, qualitative problem: Indian manufacturing, in its current form, competes predominantly on cost rather than on unique, high-value intellectual property or brand equity.
This cost-centric model makes the sector highly vulnerable to global price fluctuations and severely limits its profitability and ability to attract investment, especially when compared to a services sector with superior pricing power. To increase its nominal share of the economy—a crucial factor for attracting capital and generating wealth—the sector cannot simply produce more of the same. It must fundamentally alter what it produces, shifting towards goods that command higher prices and wider margins due to their embedded technology, innovation, and unique value proposition. This economic reality establishes the foundational imperative for the strategic shift towards research, development, and the pursuit of global indispensability that forms the core of India’s new industrial policy.
The National Manufacturing Mission (NMM): A Blueprint for a 25% GDP Share
In response to the long-term goal of elevating the industrial sector’s economic contribution, the Government of India is mobilizing the National Manufacturing Mission (NMM) as its principal policy instrument. This ambitious initiative aims to transform India’s manufacturing landscape, moving beyond incremental growth to achieve a structural shift in the economy. The NMM provides a detailed blueprint designed to raise manufacturing’s share of GDP to 25% by the target year of 2035.
Financial Architecture and Funding Mechanism
The financial commitment underpinning the NMM signals a significant scaling of ambition. The government plans a substantial ₹10,000 crore outlay for the mission, a hundred-fold increase from the modest ₹100 crore initially allocated in the Union Budget for fiscal year 2026. This infusion of capital is designed to de-risk private investment and catalyze development in strategic areas.
The core funding strategy revolves around the deployment of Viability Gap Funding (VGF). VGF is a government grant designed to bridge the financial shortfall between a project’s total cost and the amount of financing that the private sector is willing to provide. By covering a portion of the capital costs, this mechanism makes large-scale, long-gestation projects financially viable for private investors, thereby spurring investment in greenfield projects within priority sectors and niche manufacturing domains. An inter-ministerial committee, including representatives from key ministries and the federal think-tank NITI Aayog, has proposed this VGF-led approach to stimulate growth.
Strategic Approach: Coordination and Clusters
The NMM’s operational design is as crucial as its financial architecture. It is not intended to create a new, monolithic bureaucracy or alter the existing mandates of government departments. Instead, it is conceived as a central coordinating body. Its primary function is to set clear and ambitious output and export targets and to ensure that various ministries—such as those for electronics, steel, heavy industries, and renewable energy—remain aligned and work in concert to achieve these national goals.
A cornerstone of the NMM’s strategy is a commitment to regionally balanced industrial expansion through a cluster-based approach. This model seeks to create specialized ecosystems where proximity to raw materials, suppliers, and skilled labor can reduce costs and foster innovation. The government has identified and mapped seven distinct regional clusters, each with designated sectoral strengths, to guide this development. This approach leverages existing regional capabilities while aiming to cultivate new ones, moving away from a one-size-fits-all industrial policy.
Target Sectors and Value Chains
The mission’s focus is squarely on high-value “sunrise sectors” that are critical for India’s future economic growth, energy security, and technological sovereignty. The finance minister has specifically identified industries essential for the green energy transition and advanced manufacturing as priorities for NMM support. These include solar PV cells, electric vehicle (EV) batteries, motors, and controllers, electrolyzes for green hydrogen production, wind turbines, high-voltage transmission equipment, and grid-scale batteries.1 Beyond these, the cluster approach also targets other high-potential areas like aerospace, semiconductors, and pharmaceuticals.
A parallel objective of the NMM is to strengthen India’s position within global value chains. This involves not only attracting large-scale anchor investments but also fortifying the domestic industrial ecosystem. The mission aims to support and integrate 66 million micro, small, and medium enterprises (MSMEs) into these value chains, enhancing domestic value addition and reducing reliance on imported components. This dual focus on both large-scale projects and the broader MSME base is intended to create a more resilient and deeply embedded manufacturing sector, capable of closing the gap with global leaders like China, which currently commands 31.6% of global manufacturing output compared to India’s 2.9%.
However, the NMM’s design as a “coordinating body” without its own direct executive or legislative mandate presents a significant potential vulnerability. Its ultimate success will be contingent not on its strategic vision alone, but on its ability to effectively influence powerful, established ministries and, more critically, to drive tangible action on the most persistent obstacles to industrialization. Key challenges such as land acquisition and labor law implementation fall under the jurisdiction of state governments. The NMM can propose a semiconductor cluster in the Southwest, for example, but it possesses no direct authority to acquire the necessary land or reform the local labor regulations required to make that cluster globally competitive. This creates a potential disconnect between the mission’s ambitious goals and its operational capacity to overcome the foundational, long-standing impediments to India’s industrial ascent.
Critical Headwinds: The Structural and Geopolitical Hurdles to Industrial Ascent
While the National Manufacturing Mission articulates a compelling vision for India’s industrial future, its path to realization is fraught with significant and deeply entrenched challenges. These headwinds are both domestic and geopolitical in nature, ranging from fundamental structural weaknesses in the Indian economy to a complex and competitive global landscape. Overcoming these hurdles will require more than just financial outlay; it will demand sustained political will, intricate diplomacy, and a fundamental shift in private sector behavior.
Domestic Structural Fault Lines
The most immediate obstacles to India’s manufacturing ambitions are internal. These long-standing issues have historically constrained industrial growth and continue to pose a formidable threat to the success of the NMM.
Funding Adequacy
A primary concern raised by economic experts is the sufficiency of the NMM’s planned ₹10,000 crore fund. While a substantial increase from its initial allocation, there are fears that this amount, when tasked with catalyzing a nationwide industrial transformation across multiple sunrise sectors, will be “spread too thin” to have a decisive impact. N.R. Bhanumurthy, director at the Madras School of Economics, has explicitly stated that the proposed sum “may not be an adequate policy intervention” to achieve the monumental goal of raising manufacturing’s GDP share to 25%.
The Land and Labor Impasse
The most critical and persistent bottlenecks for manufacturing growth in India are the unresolved issues of land acquisition and labor law reform. Experts widely agree that “actual growth is likely to come in by land and labour reforms”. The process of land acquisition for industrial projects remains complex and contentious, often leading to significant delays and cost overruns. Land is a concurrent list subject, requiring coordination between central and state governments, which complicates the creation of a streamlined national framework. Similarly, while the central government has consolidated 29 existing labor laws into four new codes, their implementation is stalled. Labor is also on the concurrent list, meaning states must frame and notify their own rules for the codes to become enforceable. Several key industrial states have yet to complete this process, leaving businesses in a state of regulatory uncertainty and unable to benefit from the intended simplification. This legislative gridlock remains the single greatest impediment to creating a flexible and competitive environment for large-scale manufacturing.
High Operating Costs
Beyond regulatory hurdles, high operating costs severely impact the cost-efficiency and export competitiveness of Indian manufacturers. The Confederation of Indian Industry (CII) has highlighted the debilitating effect of elevated logistics and power costs.1 While infrastructure projects like the Eastern and Western Dedicated Freight Corridors (DFCs) are welcome steps toward improving logistics, the CII argues that momentum must be sustained by fast-tracking the proposed East Coast, East-West, and North-South DFCs to create a truly world-class multimodal network. Similarly, industrial power tariffs in India are often inflated by cross-subsidization and arbitrary surcharges, hindering cost competitiveness. Rationalizing these tariffs is crucial for attracting investment and enabling manufacturers to compete on a level playing field globally.
The Geopolitical Chessboard
India’s manufacturing push is not occurring in a vacuum. It is unfolding on a complex geopolitical chessboard where competition is fierce and external relationships carry significant weight.
The China Challenge
The ultimate success of India’s export ambitions may depend less on negotiating favorable terms with partners like the US and more on its ability to effectively compete with China. Beijing has long deployed its vast state resources to sharpen its industrial edge and dominate key global sectors, a strategy formalized in its “Made in China 2025” policy. This policy aims to upgrade China’s manufacturing capabilities, increase domestic content of core materials, and achieve independence from foreign suppliers in high-tech fields. India’s 2.9% share in global manufacturing output is dwarfed by China’s 31.6%, a gap that highlights the scale of the competitive challenge. To counter China’s established clout, India will need to develop an industrial edge that extends far beyond simple cost competitiveness, requiring inventive leaps in R&D and technology.
US Trade and Tariff Barriers
A significant external challenge is the high tariff barrier in the United States, one of India’s key export markets. The US had imposed a steep 50% tariff on certain Indian goods, comprising a 25% reciprocal tariff and an additional 25% punitive tariff linked to India’s import of Russian crude oil. Ongoing negotiations for a comprehensive US-India trade deal are critical, with the potential to reduce these tariffs to a more manageable 15-16%, which would make Indian exports competitive with those from other Asian economies like Japan (15% tariff) and Vietnam (20%). While officials report that a deal is “very near” to being finalized, this reliance on a bilateral agreement introduces a significant element of external dependency and uncertainty into India’s manufacturing strategy.
Private Sector Inertia
Finally, an equally formidable challenge is internal to India’s corporate culture. For too long, the Indian private sector has been characterized by a “risk-averse mindset”. Many firms have built business models reliant on wage arbitrage and low-cost, repetitive IT services rather than making the bold, long-term, and capital-intensive bets required to build world-class products and intellectual property. With advancements in artificial intelligence beginning to erode the traditional cost advantages in services, this conservative approach is becoming increasingly untenable. Overcoming this inertia and fostering a culture of innovation and risk-taking within the private sector is a prerequisite for the success of any government-led industrial push.
These domestic and geopolitical headwinds are deeply intertwined, creating a complex “catch-22” for Indian policymakers. To become a credible “China+1” destination for global supply chains, India must first resolve its internal structural issues of land, labor, and logistics. Without these reforms, it remains a higher-risk and higher-friction operating environment compared to competitors. At the same time, without the promise of stable and profitable market access, particularly to the US, the incentive for domestic and international firms to make the massive investments required to scale up export-oriented manufacturing in India is significantly diminished. Progress on one front is therefore critically dependent on progress on the other, requiring a simultaneous and coordinated effort to reform at home while securing favorable terms abroad.
A Strategic Imperative: Forging Global Indispensability through Innovation
Confronted by structural rigidities at home and fierce competition abroad, a consensus is emerging that India’s traditional manufacturing model, based largely on cost arbitrage, is insufficient to achieve its national ambitions. The only sustainable path forward lies in a strategic paradigm shift: from “Make in India” to “Invent in India.” This evolution requires moving decisively up the value chain, not by producing cheaper goods, but by creating products and technologies “the world cannot do without”. This imperative calls for deep, sustained investment in research and development (R&D) to forge a new identity as an indispensable node in the global technological ecosystem.
Creating Technological Choke Points
The core of this new strategy is the pursuit of “strategic indispensability” by identifying and mastering a handful of critical technologies to create global choke points. This concept draws inspiration from small countries and individual companies that have achieved outsized geopolitical and economic leverage by dominating a niche but essential segment of a global value chain.
The global semiconductor industry provides powerful case studies. The Netherlands-based company ASML holds a global monopoly on the extreme ultraviolet (EUV) lithography machines required to manufacture the world’s most advanced microchips. Taiwan’s TSMC (Taiwan Semiconductor Manufacturing Company), operating on a “pure-play” foundry model, manufactures approximately 90% of the world’s most sophisticated chips for fabless design companies like Apple and Nvidia, making it the indispensable heart of global electronics production. Similarly, the UK-based company Arm, which designs processor architectures and licenses its intellectual property (IP) rather than manufacturing chips itself, is the foundation for virtually all modern smartphones and mobile devices. These examples demonstrate how technological dominance in a single, critical area can grant a country or company immense strategic importance, insulating it from purely cost-based competition. For India, emulating this model is the overarching purpose of its new R&D-focused government initiatives.
The Institutional Response: ANRF and the RDI Scheme
To catalyze this strategic pivot towards innovation, the Indian government has established a new institutional architecture designed to overhaul the country’s R&D landscape. This represents a fundamental shift in industrial policy, moving beyond incentives for production to directly funding the creation of intellectual property.
At the apex of this new structure is the Anusandhan National Research Foundation (ANRF). Established by an Act of Parliament in 2023, the ANRF is designed to be the premier body providing high-level strategic direction for research, innovation, and entrepreneurship across all scientific and technological fields. It is tasked with seeding and growing research capacity, particularly in universities, funding peer-reviewed grants, and forging collaborations between academia, industry, and government to align R&D with national priorities.
To arm the ANRF with the necessary financial muscle, the government recently announced the Research, Development and Innovation (RDI) scheme. This is a landmark initiative backed by a massive ₹1-lakh crore corpus. Managed by the ANRF, the RDI scheme aims to provide long-term financing at low or even nil interest rates specifically to spur private sector investment in R&D. Crucially, the scheme is designed to address a critical gap in the innovation lifecycle. It targets projects that have advanced beyond basic research to higher Technology Readiness Levels (TRL-4 and above), a stage often called the “valley of death” where promising technologies fail due to a lack of funding to develop prototypes and achieve market readiness. By de-risking this critical phase, the RDI scheme seeks to translate laboratory research into commercially viable, globally competitive products.
The Call to Action for the Private Sector
The government’s creation of the ANRF and the RDI scheme marks a profound evolution in its industrial strategy. It is a tacit admission that previous policies, such as the Production-Linked Incentive (PLI) schemes which reward sales and have seen mixed success, are insufficient on their own. The new focus is on incentivizing the creation of foundational IP.
However, these government initiatives, powerful as they may be, will only succeed if India’s private sector undergoes a parallel transformation. The supply-side push of capital from the RDI scheme must be met with a demand-side pull from a corporate culture that embraces risk and prioritizes deep-tech R&D. The success of these new institutions will not be measured by the amount of funds they disburse, but by their ability to catalyze a fundamental shift in corporate strategy from imitation to invention. The Indian pharmaceutical sector serves as a potent domestic model. Faced with the challenge of the WTO’s TRIPS agreement, the industry responded by substantially stepping up its R&D investment, ultimately transforming itself into a global powerhouse. Other manufacturing sectors must now emulate this journey. Proactive engagement with the ANRF and RDI scheme—through augmented funding, co-development of projects, and providing policy inputs—is essential for the private sector to help shape an R&D landscape that delivers sustainable and globally competitive outcomes for the nation.
The Five Pillars of Competitiveness: An Actionable Framework for Transformation
While high-level missions and innovation funds set the strategic direction, translating ambition into on-the-ground reality requires a comprehensive and actionable framework. The Confederation of Indian Industry (CII), representing the voice of the domestic industry, has proposed such a roadmap, structured around five strategic pillars. This framework provides a practical guide for addressing the foundational challenges that constrain the manufacturing sector and serves as a crucial complement to the government’s top-down initiatives. It implicitly argues that building a robust, enabling ecosystem is as critical, if not more so, than funding individual flagship projects.
Pillar 1: Empower the National Manufacturing Mission
The first pillar calls for the full operationalization of the National Manufacturing Mission (NMM) to serve as a dynamic, cross-ministerial, and action-oriented platform. This aligns with the NMM’s intended role as a coordinating body but emphasizes the need for clear, measurable objectives and robust governance. The CII suggests specific targets, including expanding merchandise exports to $1 trillion by 2030 and creating large-scale employment. To ensure effectiveness, a three-tier governance model is proposed for strategic oversight, implementation support, and outcome monitoring. A key recommendation under this pillar is the creation of a dedicated sub-mission for advanced manufacturing to accelerate the adoption of technologies like AI, IoT, robotics, and nanotechnology, thereby promoting R&D and global collaboration in frontier areas.
Pillar 2: Bridge the 'Missing Middle' with Capital Support
This pillar addresses a persistent structural weakness in Indian manufacturing: the ‘missing middle,’ a significant gap between large enterprises and micro-firms. Mid-sized firms, which are crucial for a vibrant supply chain, often lack access to growth capital, stifling their ability to innovate and scale. To remedy this, the CII proposes a dedicated capital support scheme offering interest-free loans and up to 50% of equity capital for projects in the ₹50-₹1,000 crore investment range. Furthermore, it recommends the establishment of two “fund-of-funds,” modeled on the success of startup financing: one to provide equity capital to SMEs, and another to finance overseas technology acquisitions. These funds would catalyze private investment and facilitate the technology upgradation necessary for global competitiveness. This ecosystem-focused approach to capital access for existing firms offers a nuanced alternative to the NMM’s project-centric VGF for new greenfield ventures.
Pillar 3: Accelerate World-Class Industrial Infrastructure
Recognizing that world-class manufacturing requires world-class infrastructure, the third pillar focuses on land and industrial parks. It calls for a robust national framework for land acquisition that streamlines processes, ensures fair compensation, and facilitates environmental compliance and stakeholder coordination. This directly confronts one of the most significant bottlenecks identified by all stakeholders.1 In tandem, the strategy advocates for building the next generation of smart industrial cities along major corridors, drawing on successful models like Sri City in Andhra Pradesh. The proposal includes a partnership with the private sector to develop 10 new cities and the creation of an empowered group of ministers to fast-track the 12 already-approved smart cities. A forward-looking national policy for private industrial parks offering ‘plug and play’ infrastructure is also recommended to attract both domestic and international manufacturers.
Pillar 4: Lower Logistics and Power Costs
This pillar targets the high input costs that directly erode the competitiveness of Indian goods. On logistics, it urges the government to sustain the momentum from the Eastern and Western Dedicated Freight Corridors (DFCs) by fast-tracking the proposed East Coast, East-West, and North-South DFCs to create a comprehensive, cost-effective multimodal logistics network. On energy, it calls for the rationalization of industrial power tariffs, which are often kept artificially high due to cross-subsidies. The CII recommends implementing a Direct Benefit Transfer (DBT) system for deserving consumers, with state governments funding subsidies directly rather than through distribution companies. This, combined with transparent tariff structures, would significantly improve cost-efficiency and investor confidence.
Pillar 5: Accelerate Smart Manufacturing and Digital Readiness
The final pillar is forward-looking, aiming to prepare Indian industry for the transition to Industry 5.0. It proposes the creation of a National Digital Maturity Framework to guide businesses on their digital transformation journey, from foundational adoption to advanced integration of smart technologies. To build a future-ready workforce, the strategy calls for establishing Centres of Excellence for Skill Development in smart manufacturing across key industrial regions. These centers would focus on bridging the talent gap in critical areas such as AI, robotics, automation, and data analytics, which are essential for driving high-productivity, innovation-led growth.
Conclusion: Charting the Path to a $7.5 Trillion Manufacturing Economy
India stands at a pivotal moment in its economic history, presented with a generational opportunity to emerge as a key player in a strategically realigning global manufacturing landscape. The nation’s strong fundamentals—a vast domestic market, a growing middle class, and a youthful demographic dividend—provide a solid foundation for a manufacturing-led economic strategy. The ambition is clear and appropriately scaled: to transform the sector into a $7.5 trillion engine of growth by 2047, serving as the cornerstone for a $30 trillion national economy by India’s centenary. The policy architecture, centered on the National Manufacturing Mission and fortified by a new, innovation-focused institutional framework in the ANRF and RDI scheme, reflects a sophisticated understanding of the challenges and a clear intent to overcome them.
However, this report has demonstrated that the gap between ambition and reality remains wide, and the path forward is laden with complexity. The statistical paradox of manufacturing’s performance—steady in real terms but declining nominally—is a clear indicator that the old model of cost-based competition has reached its limits. The new imperative is to build what the world cannot do without, achieving strategic indispensability through technological innovation. This requires not just policy pronouncements but a fundamental cultural shift within the Indian private sector, from risk aversion to bold, long-term investment in R&D.
Success hinges on relentless and coordinated execution on multiple fronts. The government’s top-down strategic missions must be complemented by a bottom-up focus on creating a robust enabling ecosystem. This demands the political courage to push through difficult and long-overdue structural reforms in land and labor, which remain the most formidable domestic barriers to industrial scale. It requires a sustained commitment to building world-class infrastructure and rationalizing input costs to ensure global competitiveness. And it necessitates a genuine, symbiotic partnership between the state and a private sector that is empowered, incentivized, and willing to lead the charge into new technological frontiers.
The stakes of this endeavor extend far beyond economic metrics. As recent global events have demonstrated, manufacturing success is also a strategic and national security imperative. The journey ahead will be a gauntlet, testing India’s policy coherence, its political resolve, and its industrial dynamism. As a Chinese government policy document starkly observed, “Without a strong manufacturing industry, there will be no country and no nation”. This serves as a powerful reminder that for India, the revitalization of its manufacturing sector is not merely an option for prosperity, but an essential condition for securing its rightful place in the new global order.
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