Twelve years on from the launch of the Make in India campaign on September 25, 2014, a look at 12 metrics spanning growth, investment, employment, and exports shows that the manufacturing sector’s share in India’s economic growth, employment, and global exports has remained largely the same since then.  

While recent incentive schemes by the government have seen some success, those gains are limited to a handful of sectors.  

While launching the campaign, Prime Minister Narendra Modi said that “industrialists don’t come due to some fancy incentive scheme” but instead need a “development and growth-oriented environment”. 

The data over the last 12 years show that while the government’s incentive schemes are the ones that have met some success, other metrics that reflect a “development and growth-oriented environment” are underperforming. 

No major boost to growth

The manufacturing sector has grown faster than the overall economy in five of the 12 years under consideration, based on the old series. Under the new series, it has outpaced overall growth in all three years (2023-24 to 2025-26) for which data is available, but that gap is shrinking fast.

The Index of Industrial Production data, which comes out once a month, is more stark. The manufacturing sector within the IIP outpaced the overall index’s growth in only three out of the 12 years, as per the old series of the index. The new series shows the manufacturing sector’s growth was the same as that of the overall index in 2023-24, but was slower in the next two years.

As far as the composition of the economy goes, the older series of Gross Value Added (GVA) data shows the manufacturing sector’s share in overall GVA is lower in 2025-26 than it was when Make in India was launched in 2014. The new series shows that the sector’s share has increased marginally from 14.6% in 2022-23 to 15.6% in 2025-26.  

Rising exports, flat share

India saw the value of its non-petroleum goods exports grow 53% to $388.3 billion in 2025-26 from $253.5 billion the year the Make in India campaign was launched. However, the data also shows that non-petroleum goods exports grew more than 400% over the 12 years before this, albeit on a much smaller base.

However, the base effect only accounts for some of this growth disparity. Data from UNCTAD shows India’s share in global merchandise exports grew from around 0.8% in 2002 to 1.7% in 2013, where it remained even in 2025-26. 

Tepid investment response 

The gross fixed capital formation (GFCF) by the private sector — a measure of its spending on real asset creation — formed a lower share of GDP in 2023-24, the latest year for which the old series has data, than it did in 2014-15. The new series, too, shows that GFCF as a percentage of GDP has been falling since 2022-23. 

The growth of FDI to the manufacturing sector has been slower than the growth in overall FDI in seven of the 12 years under consideration. Its share in overall FDI grew from nearly 48% in 2014-15 to 55% in 2025-26. 

The RBI’s data on capacity utilisation, a measure of how intensively factories are being used, shows that this metric never has been slowly increasing over the last few years, but is still below the 80% mark that is considered the limit after which companies invest to create new capacity.

The RBI’s data further shows that bank credit to industry has been growing strong over the last few years, especially led by credit to micro, small, and medium enterprises. However, experts have pointed out that, in the absence of sustained rapid growth in output, this suggests that the loans are being taken to provide working capital rather than for fresh investments.

Impact of incentives

The government’s Production-Linked Incentive schemes have yielded some results. Launched across 2020 and 2021, the 14 schemes have resulted in a cumulative investment of Rs 2.4 lakh crore as of March 2026. However, the data also shows that this performance is highly concentrated. 

The top five sectors — solar modules, pharmaceutical drugs, automobiles and their components, specialty steel, and large-scale electronics manufacturing — together account for nearly 83% of all the investment under these schemes. 

Flat employment effect

The food products, large-scale electronics manufacturing, pharmaceutical drugs, automobiles and their components, and white goods sectors cumulatively accounted for more than 86% of the 8.5 lakh people employed under these schemes. 

The government says three sectors — large-scale electronics manufacturing, IT hardware, and solar modules — have resulted in an additional 5.7 lakh of indirect employment.

Data sourced by CMIE from the Ministry of Labour and Employment shows that the total number of people employed in the manufacturing sector grew from 5.1 crore in 2016-17 to 5.3 crore in 2025-26. The manufacturing sector’s share in total employment was largely the same in 2025-26 as in a decade earlier. 

Published – September 25, 2026 06:24 am IST

As is widely understood, the annual Budget is a political document responding to short to medium-term economic challenges. Formally, it is an annual revenue and expenditure statement outlining the government’s priorities. As with any financial statement, the fine print matters the most, not obvious from the media headlines. Yet, it is useful to read the Budget closely to glean the broad direction of economic policy, especially as there are no other long-term policy documents or explicit economic targets in the public domain to locate the annual Budget.

Setting to the Budget

The proximate context of the Budget is the recent eruption of geopolitical turmoil triggered during the second term of the Donald Trump presidency in the United States. Many political and economic arrangements — or, the rules and norms of international relations that have been in place since the fall of the Berlin Wall — are now upended. India’s long-term economic and security arrangements with Russia are under threat. Mr. Trump’s steep tariffs on India’s labour-intensive goods have dashed hopes of a closer economic relationship with the U.S. In response, India is seeking closer ties with the European Union in the form of “mother of all” free trade agreement (FTA), though its details are still unclear. India’s import dependence on China continues despite the policy efforts taken, since 2020, to correct this. Diplomatic relations remain strained. For instance, China has imposed restrictions on the exports of critical minerals, tunnel boring machines and the services of skilled workers for the electric vehicle (EV) industry.

Editorial | Credible and creditable: On Union Budget 2026-27

Budget 2026-27 needs to be read in this context. Unlike previously, this Budget highlights the urgency of strengthening domestic manufacturing. It also aims to streamline import duties and procedures in order to reduce imports and achieve self-reliance, and to speed up exports.

Factually speaking, the Indian manufacturing sector has not performed satisfactorily for a while now, despite headline GDP growth of 6.5% to 7% annually in real terms (net of inflation). India has deindustrialised prematurely; the share of manufacturing in GDP has declined or, at best, has remained constant. Manufacturing employment in total employment has also declined. The official GDP numbers for manufacturing seem overstated due to infirmities in estimation. Alternative figures, based on the more reliable Annual Survey of Industries (ASI), based on time-tested production accounts of factories, show distinctly slower output growth rates. With very modest growth in fixed investment (or gross fixed capital formation), industrial capacity has eroded during the last decade.

Rising import dependence for most capital and intermediate goods is a reason for modest industrial performance. An inverted duty structure wherein intermediate goods face higher tariffs than final goods seems to be responsible for the poor industrial investments. Policy initiatives such as ‘Make in India’ (2014), Aatma Nirbhar Bharat (or Self-Reliant India Movement) in 2020 and Production Linked Incentives (2021) seem to have largely failed to dent India’s rising import dependence in manufactured goods despite some widely applauded successes in mobile phone assembly (with high import content, best exemplified by Apple iPhone exports).

Hence, the Budget aims to tackle domestic vulnerabilities.

The tariff modifications seem to correct for the inverted duty structures (IDS) by reducing basic customs duties on capital and intermediate goods in order to encourage domestic value addition. Likewise, rationalising procedures at points of entry of goods would perhaps reduce delays, thus improving ease of production and exports.

Focus on electronics, the China factor

The Budget makes substantial provision for augmenting the production of electronics parts and sub-assemblies, which form the single largest product-group of dependence on China. The same holds for rare earth materials (used in the production of EVs and electronic goods) — a choke point as the Economic Survey recently and rightly highlighted. To tackle it, the Budget proposes to create a dedicated rare earths corridor running through “mineral-rich States of Odisha, Kerala, Andhra Pradesh and Tamil Nadu … to promote mining, processing, research and manufacturing”. Similar to encouraging the production of lithium-ion cells for battery storage, the Budget proposes to extend the tax exemption on capital goods to produce these items.

Policymakers perceive India’s trade integration has to begin with labour-intensive goods. Now, with the Trump tariffs on India’s exports, there is an acute need to enhance the productivity of such goods to overcome these tariffs and ensure diversification away from the U.S. In line with this view, the Budget has laid emphasis on promoting new Micro, Small, and Medium Enterprises (MSME) clusters, modernising the old or “legacy” clusters (about 120 of them), and providing financial assistance to MSMEs to tap the capital market. In principle, these measures are welcome.

However, the Budget seems to fall short in efforts to boost fixed investment. To augment industrial capabilities, India needs to encourage investments in high-tech industries. Such technologies are mostly proprietary items of multinational corporations that often come bundled with foreign direct investment (FDI). In recent years, net FDI, as a ratio of GDP, has become practically zero. The Budget seems to make little effort to correct for the decline in foreign high-tech investments. Geopolitical uncertainties perhaps make it difficult to attract such technology-intensive investments, at least for now.

While the government is committed to promoting exports, the Budget has permitted firms located in special economic zones (SEZs) to sell a part of their output in domestic territory. This seems regressive. The government should tackle their hurdles to augment exports, rather than choose the softer option of allowing sales in the domestic market.

A silence on Centre-State fiscal issues

The Budget, which has been presented in a difficult global context, seems well-intentioned to tackle import dependence in domestic manufacturing to attain greater self-reliance. However, considering the uncertainties, the Budget seems silent on many difficult issues. Centre-State fiscal issues have also been overlooked, considering the impending implementation of the recommendations of the Sixteenth Finance Commission. Whether the proposed measures would yield desired results to reverse India’s industrial decline and import dependence (especially on China, a strategic threat) would depend on the specifics of the proposals (which we have not seen) and how they are implemented.

R. Nagaraj was with the Indira Gandhi Institute of Development Research (IGIDR), Mumbai

Published – February 02, 2026 12:16 am IST

New Delhi:

India is emerging as a global economic powerhouse, and its sail is fanned by remarkable achievements in the export sector. Over the past decade, the country evolved from being heavily reliant on imports and emerged as a global leader in exports across various sectors. The remarkable turnaround, a direct result of the policies of Prime Minister Narendra Modi-led government, is reflected in India’s ability to leverage advanced technology, innovative practices, and competitive manufacturing to meet global demands. 

Products once synonymous with Western markets, like smartphones, electric cars, french fries or premium coffee, are now proudly made in India and exported worldwide. From daily consumables to high-tech gadgets and eco-friendly vehicles, India is no longer just a consumer but a creator and supplier to the world.

The ‘Make in India’ iPhone Story

Enabled by the Modi government’s smartphone production-linked incentive (PLI) scheme, a major American company like Apple is not only manufacturing in India but also exporting its products to other countries. In 2024, Apple exported iPhones worth over Rs 1 lakh crore from India, marking a record-breaking achievement. 

The value of India’s iPhone exports increased by 42 per cent in just one year, rising from $9 billion in 2023 to $12.8 billion in 2024. Domestic production of iPhones also grew by nearly 46 per cent, and local contribution to manufacturing (value addition) increased to 15-20 per cent.  

India’s First EV Exports

French carmaker Citroen, which entered the Indian market in 2021, is now exporting the ‘Made in India’ electric vehicle (EV) to international markets. The company has made significant investments in India, including building a plant in Tamil Nadu. In April 2024, the company exported its first batch of ‘Citroen e-C3’ EVs to Indonesia from Kamarajar Port, showcasing India’s capability to produce high-quality electric vehicles for the world. 

Citroen’s success shows how India is moving ahead in the automobile sector, especially in cleaner and greener technologies. It shows that India is not only a strategic market but also a major sourcing hub for vehicles, components, and mobility technologies. 

‘Made-in-India’ Maruti Fronx Goes Global

India’s automobile industry achieved another milestone with Maruti Suzuki’s Fronx SUV becoming a hit in the Japanese market. This is the first SUV made by Maruti Suzuki India to be launched in Japan, marking a proud moment for the country. 

Maruti Suzuki shipped the first consignment of more than 1,600 units of the ‘Made-in-India’ cars to Japan in August 2024. The SUV is currently being exported to over 70 countries across the globe. 

French Fries Exporters

In the mid-2000s, India was importing over 5,000 tonnes of French fries– a popular American snack, annually. The import peaked at 7,863 tonnes in 2010-11 (Mar-Apr). However, over the past few years, India emerged as a major exporter of the potato product.

In 2023-24, the country exported 135,877 tonnes of French fries valued at Rs 1,478.73 crore, reaching markets in Southeast Asia, the Middle East, Japan, and Taiwan. 

Brewing Success with Indian Coffee

India’s coffee industry has witnessed remarkable growth, with exports nearly doubling over the last 4 years. In FY 2023-24, coffee exports reached an impressive $1.29 billion, up from $719.42 million in 2020-21, positioning India as the seventh-largest coffee producer in the world. Indian coffee is now a favourite across international borders. 

New Delhi:

India’s manufacturing industry is bearing the brunt of a fallout between the United States and China over threats of a trade and tariff war by the incoming Trump administration, and its retaliatory measures imposed by Beijing.

In recent years, under its flagship ‘Make in India’ programme, India has seen exponential growth in key sectors like solar power, electronics and mobile manufacturing, and the automobile sector, especially for electric vehicles or EVs – all of which are directly or indirectly dependent on raw materials, components, and ancillaries supplied by China.

As China prepares for an imminent face-off with the US, which may be just days away with Donald Trump’s return as President on January 20, Beijing has already made the first move by taking some precautionary measures as a warning to Washington that it too will suffer the trade war.

China has put restrictions on the export of key raw materials, essential rare earth minerals, components, high-tech equipment, and machinery which are needed to manufacture solar panels, its parts, mobile phones and other gadgets, as well as EVs and its batteries.

These curbs not just pertain to direct exports to the United States, but to any other country which uses them to manufacture finished products meant to be shipped to the US.

In December 2024, China banned the export of gallium and germanium, which are vital for solar cell production. Shortly after that, it also banned antimony, critical for semiconductors and essential defence technologies. Earlier this month, Beijing further declared that it will now add lithium extraction and battery cathode technologies – which are crucial for EV battery manufacturing – to its controlled export list.

With the US having reduced its dependence on China for a large part of its overall imports, Washington has, in recent years, increasingly turned to New Delhi as an alternative to Beijing to fill the deficit. And so, China’s latest curbs, though aimed at the US, has indirectly hurt India too.

“Indian firms in electronics, solar, and EV sectors are facing major delays and disruptions as China has blocked exports of inputs and machinery,” economic think-tank GTRI founder Ajay Srivastava said, adding that “India is particularly vulnerable to China’s export restrictions, as many of its industries depend on Chinese machinery, intermediate goods, and components.”

“This also signals deeper geopolitical tensions and trade war. We hope India-specific restrictions go away soon as they will also hurt China,” he added.

India’s imports from China increased to $101.73 billion in 2023-24 from $98.5 billion in 2022-23.

The think-tank even suggested that China’s moves may be double-edged, as Beijing has been displeased for a while over New Delhi’s restrictions on Chinese investments and visas for its nationals.

In 2020, shortly after the deadly Galwan Valley clash between Indian and Chinese soldiers in eastern Ladakh, the Government of India had made it mandatory for countries sharing land borders with India to seek its approval for investments in any sector. The move was also made keeping in mind India’s national security objectives in its volatile neighbourhood.
 

New Delhi:

India’s manufacturing industry is bearing the brunt of a fallout between the United States and China over threats of a trade and tariff war by the incoming Trump administration, and its retaliatory measures imposed by Beijing.

In recent years, under its flagship ‘Make in India’ programme, India has seen exponential growth in key sectors like solar power, electronics and mobile manufacturing, and the automobile sector, especially for electric vehicles or EVs – all of which are directly or indirectly dependent on raw materials, components, and ancillaries supplied by China.

As China prepares for an imminent face-off with the US, which may be just days away with Donald Trump’s return as President on January 20, Beijing has already made the first move by taking some precautionary measures as a warning to Washington that it too will suffer the trade war.

China has put restrictions on the export of key raw materials, essential rare earth minerals, components, high-tech equipment, and machinery which are needed to manufacture solar panels, its parts, mobile phones and other gadgets, as well as EVs and its batteries.

These curbs not just pertain to direct exports to the United States, but to any other country which uses them to manufacture finished products meant to be shipped to the US.

In December 2024, China banned the export of gallium and germanium, which are vital for solar cell production. Shortly after that, it also banned antimony, critical for semiconductors and essential defence technologies. Earlier this month, Beijing further declared that it will now add lithium extraction and battery cathode technologies – which are crucial for EV battery manufacturing – to its controlled export list.

With the US having reduced its dependence on China for a large part of its overall imports, Washington has, in recent years, increasingly turned to New Delhi as an alternative to Beijing to fill the deficit. And so, China’s latest curbs, though aimed at the US, has indirectly hurt India too.

“Indian firms in electronics, solar, and EV sectors are facing major delays and disruptions as China has blocked exports of inputs and machinery,” economic think-tank GTRI founder Ajay Srivastava said, adding that “India is particularly vulnerable to China’s export restrictions, as many of its industries depend on Chinese machinery, intermediate goods, and components.”

“This also signals deeper geopolitical tensions and trade war. We hope India-specific restrictions go away soon as they will also hurt China,” he added.

India’s imports from China increased to $101.73 billion in 2023-24 from $98.5 billion in 2022-23.

The think-tank even suggested that China’s moves may be double-edged, as Beijing has been displeased for a while over New Delhi’s restrictions on Chinese investments and visas for its nationals.

In 2020, shortly after the deadly Galwan Valley clash between Indian and Chinese soldiers in eastern Ladakh, the Government of India had made it mandatory for countries sharing land borders with India to seek its approval for investments in any sector. The move was also made keeping in mind India’s national security objectives in its volatile neighbourhood.
 

New Delhi:

India’s aim to become a global manufacturing hub for defence has taken a leap in the last decade with a ten-fold rise in defence exports, said Defence Minister Rajnath Singh. Sharing the numbers, he said India’s exports have crossed a record Rs 21,000 crore, up from Rs. 2,000 crore ten years ago.

Mr Singh went on to say that India has set a target for annual defence exports to cross Rs. 50,000 crore within the next five years. He was addressing officers at the Army War College in Mhow Cantonment in Madhya Pradesh.

“Our defence exports, which were around Rs 2,000 crore a decade ago, have crossed the record figure of Rs 21,000 crore today. We have set an export target of Rs 50,000 crore by 2029,” Mr Singh said.

The defence minister’s speech focused on the evolving nature of warfare globally. He emphasised on how the mastering of frontier technologies is essential in today’s era of technology.

Elaborating on his statement, Mr Singh said “Unconventional methods of warfare – like information warfare, Artificial Intelligence or AI-based warfare, proxy warfare, electromagnetic warfare, space warfare, and cyber-attacks are posing a big challenge.” He stressed on the need for the military to be well-trained and equipped to fend off such attacks.

Speaking about challenges at a global level, Mr Singh said that some officers will in future be sent s defence attaches. They must ensure that national interests are secure at the global level. “When you take up this post of defence attaches, you should imbibe the government’s vision of ‘aatmanirbhar Bharat’. Only through self-reliance can India strengthen its defence capabilities and gain more respect on the world stage,” he said.

Stressing on the importance of a strong economy and a robust national security, the defence minister said “Economic prosperity is possible only when full attention is paid to security. Similarly, the security system will be robust only when the economy is strong. Both complement each other.”

Upon his arrival at Mhow Contonment, Rajnath Singh was briefed about significance of the Army War College in training and empowering military leaders for war-fighting across the entire spectrum of warfare.

Mr Singh was also apprised about the global footprint that the institute achieved via training of officers from friendly countries and contributing immensely towards military diplomacy.

(Inputs from PTI)
 

Moscow:

Russia will set up manufacturing plants across India, Vladimir Putin said today as he praised Prime Minister Narendra Modi for his “India-first” policies. President Putin, who spoke at an investment summit in Moscow today, said he was impressed by how PM Modi’s ‘Make in India’ initiative was “strengthening India’s position globally”.

Expressing his admiration for Prime Minister Modi, President Putin acknowledged how New Delhi’s policies have contributed to India’s development by creating a a stable environment for growth.

Impressed with the ‘Make in India’ policy, Mr Putin said, “Prime Minister Modi has a program called Make in India. We are also ready to set up our manufacturing operations in India. The Indian government, under the Prime Minister’s leadership, has been creating stable conditions, driven by a policy of putting India first. We believe that investing in India is profitable.” He said that Russian company Rosneft has recently invested $20 billion in India.

Mr Putin also emphasised how India’s leadership has focused on “prioritising its national interests” which has translated to India’s robust growth and the well-being of its citizens, making a special mention of how India created “stable conditions” for small and medium-sized enterprises (SMEs).

In his speech at the 15th VTB Russia Calling Investment Forum, President Putin also highlighted the significance of the evolution of the BRICS and BRICS+ forums and the contribution of Russia’s import substitution program in that context.

President Putin also urged for greater cooperation among BRICS nations to support the growth of SMEs and encouraged member countries to identify key areas for collaboration at the upcoming summit in Brazil next year. “I urge my BRICS colleagues to evaluate the current situation in key areas of cooperation,” he said.

Referring to the investment platform Russia is developing with partner countries in BRICS, President Putin said that it has the potential to benefit all partners and is expected to become an important instrument for supporting our economies and providing financial resources to the countries of the Global South and East.
 

Moscow:

Russia will set up manufacturing plants across India, Vladimir Putin said today as he praised Prime Minister Narendra Modi for his “India-first” policies. President Putin, who spoke at an investment summit in Moscow today, said he was impressed by how PM Modi’s ‘Make in India’ initiative was “strengthening India’s position globally”.

Expressing his admiration for Prime Minister Modi, President Putin acknowledged how New Delhi’s policies have contributed to India’s development by creating a a stable environment for growth.

Impressed with the ‘Make in India’ policy, Mr Putin said, “Prime Minister Modi has a program called Make in India. We are also ready to set up our manufacturing operations in India. The Indian government, under the Prime Minister’s leadership, has been creating stable conditions, driven by a policy of putting India first. We believe that investing in India is profitable.” He said that Russian company Rosneft has recently invested $20 billion in India.

Mr Putin also emphasised how India’s leadership has focused on “prioritising its national interests” which has translated to India’s robust growth and the well-being of its citizens, making a special mention of how India created “stable conditions” for small and medium-sized enterprises (SMEs).

In his speech at the 15th VTB Russia Calling Investment Forum, President Putin also highlighted the significance of the evolution of the BRICS and BRICS+ forums and the contribution of Russia’s import substitution program in that context.

President Putin also urged for greater cooperation among BRICS nations to support the growth of SMEs and encouraged member countries to identify key areas for collaboration at the upcoming summit in Brazil next year. “I urge my BRICS colleagues to evaluate the current situation in key areas of cooperation,” he said.

Referring to the investment platform Russia is developing with partner countries in BRICS, President Putin said that it has the potential to benefit all partners and is expected to become an important instrument for supporting our economies and providing financial resources to the countries of the Global South and East.