The manufacturing sector plays a crucial role in India’s economic development by generating large-scale employment, boosting GDP growth, and driving structural transformation from agriculture to industry. However, its performance has remained below potential, with the sector contributing only about 15–17% of GDP and around 11–12% of total employment. Constraints such as high logistics costs, infrastructure gaps, low R&D spending, skill mismatches, regulatory complexity, and dominance of informal enterprises have slowed progress. Government initiatives including Make in India, Production Linked Incentive schemes, PM Gati Shakti, Atmanirbhar Bharat, and Skill India aim to raise competitiveness, enhance domestic value addition, and integrate India more deeply into global value chains. Overall, manufacturing remains central to India’s growth strategy, but sustained reforms and investment are needed to fully realise its potential.
Click to View MoreIndustrial parks are planned industrial ecosystems that provide serviced land, shared infrastructure, and simplified governance to accelerate manufacturing growth in India. Backed by initiatives such as plug-and-play parks, the India Industrial Land Bank, industrial corridors, and the Industrial Park Rating System, they play a crucial role in attracting investment, generating employment, promoting sustainability, and strengthening India’s integration into global value chains, while also requiring continuous upgrades to address infrastructure gaps, regional imbalances, and environmental challenges.
Click to View More
Green industrialisation is an emerging development strategy that integrates climate action with industrial growth by promoting low-carbon, resource-efficient manufacturing. It recognises that achieving decarbonisation requires building domestic clean-technology capabilities, creating green jobs, and restructuring supply chains. For countries like India, green industrialisation offers a pathway to balance climate commitments with economic development, competitiveness, and inclusive growth, provided it is supported by coherent policies, adequate finance, and global cooperation.
Click to View MoreQuality Control Orders (QCOs) in India, intended to improve product quality, have largely targeted raw materials and intermediate goods rather than finished products. This has increased input costs, disrupted supply chains, and reduced trade competitiveness, particularly affecting MSMEs. Imports of critical inputs have fallen, exports have seen short-term gains but long-term decline, and domestic suppliers have gained market concentration advantages. Aligning QCOs with global standards, focusing on finished goods, strengthening testing infrastructure, and supporting MSMEs are key steps to mitigate these challenges.
Click to View MoreIndia’s Index of Industrial Production (IIP) slipped to a three-month low of 4% in September 2025, reflecting slow growth in mining, primary goods, and consumer non-durables sectors. While consumer durables and manufacturing saw improvement due to GST reforms and festival demand, the overall industrial activity in the first half of FY 2025-26 was the slowest in five years. Government measures like GST rate cuts, PLI schemes, MSME credit support, and infrastructure development aim to revive growth. A holistic approach involving investment promotion, modernization, skill development, and policy stability is critical to sustain industrial growth and boost economic resilience.
Click to View More
© 2026 iasgyan. All right reserved