Make in India and Manufacturing Policy — Economic Framework
Economic Framework
Make in India is a flagship initiative launched in September 2014 to transform India into a global manufacturing hub by increasing manufacturing's GDP share from 16% to 25% by 2025 and creating 100 million jobs by 2022.
The initiative focuses on 25 key sectors including automobiles, textiles, pharmaceuticals, defense, and electronics through four pillars: new processes (simplified procedures), new infrastructure (industrial corridors), new sectors (FDI liberalization), and new mindset (government-industry partnership).
Key reforms include significant FDI liberalization (defense manufacturing FDI increased from 26% to 74%), ease of doing business improvements (ranking improved from 142nd to 63rd), and development of industrial corridors like Delhi-Mumbai Industrial Corridor.
The initiative integrates with Digital India, Skill India, and Startup India for comprehensive transformation. Recent evolution includes Production Linked Incentive (PLI) schemes worth ₹1.97 lakh crore across 14 sectors, representing targeted, performance-based manufacturing promotion.
Post-COVID-19, Make in India has aligned with Atmanirbhar Bharat emphasizing supply chain resilience and import substitution while maintaining global integration focus. Major achievements include record FDI inflows, manufacturing growth, and sector-specific successes in mobile manufacturing and pharmaceuticals.
Challenges include infrastructure bottlenecks, skill gaps, regulatory complexity, and global competition. The initiative represents India's strategic positioning in global value chains during a period of supply chain reconfiguration.
Important Differences
vs National Manufacturing Policy 2011
| Aspect | This Topic | National Manufacturing Policy 2011 |
|---|---|---|
| Scope | Comprehensive initiative covering manufacturing, services, infrastructure, and governance reforms | Focused primarily on manufacturing sector development and industrial promotion |
| Approach | Global integration with emphasis on FDI attraction and export promotion | Domestic market-oriented with limited focus on global value chain integration |
| Policy Framework | Four-pillar strategy with new processes, infrastructure, sectors, and mindset | Traditional industrial policy approach with investment promotion and infrastructure development |
| Implementation | High-level political commitment with PM leadership and integrated approach across ministries | Ministry-level implementation with limited cross-sectoral coordination |
| Target Timeline | 25% manufacturing GDP share by 2025, 100 million jobs by 2022 | 25% manufacturing GDP share by 2022 with focus on employment generation |
vs China's Manufacturing Strategy
| Aspect | This Topic | China's Manufacturing Strategy |
|---|---|---|
| Development Stage | Emerging manufacturing hub seeking to increase manufacturing GDP share from 16% to 25% | Established manufacturing powerhouse with 28% manufacturing GDP share transitioning to high-tech manufacturing |
| Policy Focus | Attracting global manufacturers through FDI liberalization and ease of doing business reforms | Made in China 2025 focuses on upgrading to high-tech manufacturing and reducing dependence on foreign technology |
| Market Approach | Open economy approach with emphasis on FDI attraction and global integration | State-led approach with significant government investment and strategic sector protection |
| Competitive Advantage | Large domestic market, demographic dividend, English-speaking workforce, democratic institutions | Established supply chains, infrastructure, manufacturing ecosystem, and scale economies |
| Challenges | Infrastructure gaps, skill development, regulatory complexity, and late entry into global manufacturing | Rising labor costs, environmental concerns, trade tensions, and technology transfer restrictions |