The next phase of Make in India

Source: The post “The next phase of Make in India” has been created based on “The next phase of Make in India” published in “Business Line” on 25th September 2026.

UPSC Syllabus: GS-3- Economy 

Context: Make in India was launched in 2014 with the objective of making India a major manufacturing hub by promoting production for India and for the world. Over the last twelve years, it has evolved from an initiative into a broader manufacturing ecosystem supported by ease of doing business, infrastructure development, digital and tax reforms, investment, PLI schemes and innovation.

Achievements of Make in India

1. Improved Ease of Doing Business

1. India has reduced more than 47,000 compliances as of November 2025 through simplification, digitisation, decriminalisation and removal of redundant compliances.
2. The National Single Window System has integrated approvals across 32 Central Ministries and 34 States/UTs, covering more than 686 Central and 7,498 State approvals.
3. The Jan Vishwas (Amendment of Provisions) Act, 2026 has further strengthened trust-based governance by decriminalising 717 provisions and amending 784 provisions across 79 Central Acts.

2. Expansion of Infrastructure

1. The development of Dedicated Freight Corridors, Industrial Corridors, Sagarmala and Bharatmala has improved connectivity between production centres and markets.
2. The expansion of ports and airports, along with PM Gati Shakti, has strengthened integrated logistics planning and helped reduce logistics costs.

3. Digital and Tax Reforms

1. The introduction of GST has created a more integrated national market and facilitated the movement of goods across states.
2. Platforms such as ONDC and the Unified Logistics Interface Platform (ULIP) have strengthened India’s digital commerce and logistics infrastructure.
3. Thus, India’s digital public infrastructure is increasingly supporting its physical manufacturing ecosystem.

4. Increase in Foreign Investment

1. India has liberalised FDI norms in sectors such as defence, railways, insurance, construction and space, thereby improving access to global capital, technology and expertise.
2. FDI inflows increased to ₹49.46 lakh crore during 2014–24, compared with ₹25.40 lakh crore during the previous decade.

5. Success of the Production Linked Incentive Scheme

1. As of June 2026, the PLI schemes have attracted ₹2.58 lakh crore in investment, generated ₹23.79 lakh crore in production and sales, and contributed to ₹15.53 lakh crore in exports.
2. The PLI schemes have also supported more than 14.57 lakh direct and indirect jobs.
3. In the electronics sector, production reached ₹13.11 lakh crore in FY 2025–26, while electronics exports reached ₹4.24 lakh crore.
4. In the automobile sector, the Auto PLI scheme has attracted ₹45,477 crore in investment and generated more than 67,000 jobs.

6. Development of Semiconductor and Industrial Ecosystem

1. The India Semiconductor Mission, with a recently announced outlay of ₹1.27 lakh crore, aims to strengthen India’s semiconductor ecosystem and deepen the value chain.
2. The BHAVYA Scheme, with an outlay of ₹33,660 crore, aims to establish 100 world-class industrial parks during FY 2026–27 to FY 2030–31.
3. These industrial parks can provide common infrastructure and help MSMEs achieve greater scale and competitiveness.

7. Support to MSMEs and Startups

1. ECLGS 5.0 aims to facilitate an additional credit flow of ₹2.55 lakh crore, thereby supporting businesses facing financial pressures.
2. The Government e-Marketplace (GeM) has facilitated procurement of more than ₹20 lakh crore through over three crore orders.
3. Startup India has enabled more than 2.5 lakh recognised startups, which have generated over 25 lakh jobs.
4. Nearly half of these recognised startups have emerged from Tier-2 and Tier-3 cities, thereby promoting entrepreneurship beyond major urban centres.

8. Promotion of R&D and Innovation

1. The ₹1 lakh crore Research, Development and Innovation (RDI) Fund aims to promote private-sector research, deep-tech development and high-impact innovation.
2. This initiative can help India move beyond scale and assembly towards technology-led manufacturing, stronger intellectual property creation and greater domestic value addition.

9. Greater Global Market Access

1. India has signed nine FTAs covering 38 countries in six years, thereby expanding preferential market access for Indian manufacturers.
2. These agreements can help Indian companies diversify export destinations, integrate more deeply into global value chains and increase production for international markets.

Challenges

1. Limited Domestic Manufacturing Depth

1. Although India has expanded its final assembly capabilities, it still needs to deepen domestic manufacturing of components, raw materials, precision parts and capital goods.
2. Greater domestic value addition is necessary to make manufacturing more resilient and competitive.

2. Weak Linkages between Large Industries and MSMEs

1. Stronger linkages between large Original Equipment Manufacturers (OEMs) and MSME suppliers are required to develop efficient domestic supply chains.
2. This can help MSMEs become an integral part of large manufacturing ecosystems.

3. Need for Export-Oriented Manufacturing Clusters

1. India needs specialised manufacturing clusters equipped with plug-and-play infrastructure, testing laboratories, logistics facilities and worker housing.
2. Such clusters can reduce logistics costs and help Indian manufacturers achieve economies of scale.

4. Technology Gap

1. Indian manufacturing needs to move beyond cost competitiveness towards technology competitiveness.
2. Greater adoption of AI, automation and Industry 4.0 is required to improve productivity, quality and efficiency.

5. Limited R&D and Intellectual Property Creation

1. India needs greater private-sector investment in research and development, deep technology and innovation.
2. Stronger R&D capabilities are essential for developing high-value products and increasing domestic technological capabilities.

6. Under-utilisation of FTAs

1. Signing FTAs alone cannot ensure higher exports because Indian industries also need to effectively utilise the preferential market access provided by these agreements.
2. Greater awareness, better standards, quality improvement and stronger export capabilities are therefore required.

7. Difficulty in Technology Adoption by MSMEs

1. Many MSMEs require greater support to adopt AI, automation, predictive maintenance, digital twins and AI-based quality control.
2. Without wider technology adoption, MSMEs may find it difficult to remain competitive in increasingly technology-driven global markets.

Way Forward

1. Deepen Domestic Value Addition

1. India should promote domestic production of components, raw materials, precision parts and capital goods to reduce dependence on external sources.
2. Stronger supply-chain linkages should be developed between large industries and MSMEs to increase domestic value addition.

2. Develop Export-Oriented Manufacturing Clusters

1. India should develop world-class manufacturing clusters with plug-and-play infrastructure, testing laboratories, logistics facilities and worker housing.
2. These clusters should focus on sectors such as electronics, textiles, auto components, chemicals and engineering.

3. Continue Trust-Based Governance

1. India should continue Non-Financial Regulatory Reforms (NFRR) and legislative decriminalisation under the Jan Vishwas framework.
2. Regulatory simplification should be accompanied by greater transparency and accountability.

4. Promote Smart Manufacturing

1. The government should support MSMEs in adopting AI, automation and Industry 4.0 technologies.
2. Shared Industry 4.0 facilities can be developed within manufacturing clusters to make advanced technologies accessible to smaller firms.
3. Technologies such as predictive maintenance, digital twins and AI-based quality control should be encouraged to improve manufacturing efficiency.

5. Build Human Capital for Industry 4.0

1. Workers should be reskilled and upskilled for human-machine collaboration.
2. Skill-development programmes should be aligned with emerging technologies and the changing requirements of modern manufacturing.

6. Strengthen R&D and Innovation

1. The RDI Fund should be effectively utilised to promote private-sector R&D, deep-tech innovation and intellectual property creation.
2. The AI Mission should be linked with manufacturing to encourage the development of technology-driven production capabilities.

7. Maximise the Benefits of FTAs

1. Indian industries should be supported in effectively utilising existing FTAs and accessing international markets.
2. Improvements in product standards, quality, logistics and export capabilities can help Indian firms integrate more deeply into global value chains.

Conclusion: Make in India has evolved from a policy initiative into a broader manufacturing ecosystem supported by infrastructure, PLI schemes, digital reforms, investment, startups and innovation. The next phase should focus on deeper domestic value addition, export-oriented clusters, stronger R&D and smarter manufacturing through AI and Industry 4.0. This approach can help India move from being primarily a large-scale assembly and manufacturing destination towards a technology-driven global manufacturing hub.

Question:  “Make in India has evolved from an initiative into a national manufacturing mission.” Discuss its major achievements, challenges and the way forward for strengthening India’s manufacturing competitiveness.

Source: Business Line