Make in India
Prelims: Indian economy
Mains: GS Paper III: Indian economy
Current relevance:
Twelve years after the launch of Make
in India on 25 September 2014, an assessment of 12 indicators covering
economic growth, investment, employment and exports shows that India’s
manufacturing sector has not materially increased its share in economic
growth, employment or global exports.
Highlights:
1. Manufacturing Growth and Economic
Contribution
·
Manufacturing
grew faster than the overall economy in half of the 12 years under the
old series.
·
Under
the new series, manufacturing growth exceeded overall economic growth in
all three available years, 2023–24 to 2025–26, although the growth gap
has narrowed.
·
Under
the old IIP series, manufacturing outpaced overall IIP growth in only 3 of
12 years; under the new series, it matched overall IIP growth in 2023–24
but remained slower in the following two years.
·
Under
the older GVA series, manufacturing’s share of GVA in 2025–26 was lower
than its share when Make in India was launched in 2014.
·
Under
the new GVA series, its share increased marginally from 14.6% in 2022–23 to
15.6% in 2025–26.
·
Overall,
the increase in manufacturing’s contribution to economic activity remained limited
over the period considered.
2. Exports, FDI and Global
Manufacturing Position
·
Non-petroleum
goods exports increased from $253.5
billion in 2014 to $388.3 billion in 2025–26, a 53% increase.
·
However,
exports had grown by more than 400% during the preceding 12 years,
although from a smaller base.
·
India’s
share in global merchandise exports rose from around 0.8% in 2002 to 1.7%
in 2025–26.
·
Manufacturing-sector
FDI growth was slower than overall FDI growth in 7 of the 12 years
considered.
· Despite this, manufacturing’s share of total FDI increased from nearly 48% in 2014–15 to 55% in 2025–26.
3. Investment, Capacity and
Industrial Financing
· Private-sector GFCF as a share of GDP was lower in 2023–24 than in 2014–15 under the old series.
· The new
series also indicates that GFCF as a percentage of GDP has declined since
2022–23.
· Capacity
utilisation has gradually
increased in recent years but remains below the 80% level identified in
the given analysis as the point associated with companies creating new
capacity.
· Bank
credit to industry,
particularly credit to MSMEs, has grown strongly in recent years.
· The given analysis notes that, without sustained rapid output growth, increased industrial credit may reflect greater use of loans for working capital rather than fresh investment.
4. PLI Outcomes and Overall
Manufacturing Performance
· The 14 PLI schemes, launched during 2020–21, have generated measurable investment.
· Cumulative
PLI investment reached ₹2.4 lakh crore as of March 2026.
· However,
according to the given analysis, investment is concentrated in a few sectors: solar
modules, pharmaceutical drugs, automobiles and components, specialty steel and
large-scale electronics manufacturing, which together account for nearly 83%
of total PLI investment.
· Thus,
the assessment shows progress in recent manufacturing growth, FDI share,
capacity utilisation and PLI-supported investment, while also highlighting
limited improvement in manufacturing’s economic share, global
merchandise-export share and private investment intensity.
· The
concentration of PLI investment in selected sectors indicates that
manufacturing gains have been uneven across sectors.
Source: THE HINDU - https://www.thehindu.com/business/Economy/12-years-of-make-in-india-in-12-metrics-low-and-patchy-impact-on-growth-employment-global-share/article71505448.ece