India is making another high-stakes push to transform itself into a global manufacturing powerhouse.
This time, the strategy is not built around large subsidies or headline spending. Instead, the government is betting on structural reform.
India aims to nearly triple its exports by 2035 by boosting manufacturing output and lifting annual goods exports to about $1.3 trillion, Reuters reported citing two government officials. The plan prioritizes deep regulatory changes over heavy fiscal outlays.
The initiative marks Prime Minister Narendra Modi’s third attempt to raise manufacturing’s share of the economy after earlier efforts fell short.
A Renewed Push After Past Setbacks
India’s manufacturing sector has long struggled to gain momentum. The Modi government launched the Make in India campaign in 2014 and followed it with a $23 billion production-linked incentive program in 2020. Both aimed to raise manufacturing to 25 percent of gross domestic product. Neither succeeded.
“In past years, several government initiatives to boost manufacturing growth have led to modest, incremental progress at best. What is needed is a bold, focused and cohesive strategy to drive transformative change,” said a government official involved in drafting the new policy, according to Reuters
This time, the government believes the problem is not capital, but complexity.
Fifteen Priority Sectors in Focus
The new strategy prioritizes manufacturing across 15 sectors seen as critical to growth, exports, and job creation. These include high-end semiconductors, metals, and labor-intensive industries such as leather.
Officials said the goal is to strengthen India’s position in global supply chains while reducing reliance on imports in advanced technologies. Manufacturing hubs will be developed to support scale, efficiency, and export competitiveness.
The government plans to spend about 100 billion rupees, or roughly $1 billion, to build infrastructure for around 30 manufacturing hubs. In addition, grants totaling $218 million will be provided for advanced sectors such as semiconductor fabrication and energy storage.
The officials requested anonymity as they were not authorized to speak to the media.
Why Spending Is Taking a Back Seat
Unlike earlier efforts, funding under the new plan will be modest. Officials said the focus is on cutting regulatory and compliance burdens, which they described as the single biggest obstacle facing Indian manufacturing.
Financial support for companies will be decided on a case-by-case basis. Recommendations will come from a newly created government panel and be routed to relevant administrative departments. This will replace the large, pre-announced fiscal packages used in earlier schemes.
The Finance Ministry and government think tank NITI Aayog, which is drafting the policy, did not respond to requests for comment.
National Manufacturing Mission Takes Shape
The new framework will operate under the National Manufacturing Mission. The mission was announced in last year’s budget, but details were not disclosed at the time.
Officials said more clarity could come in the federal budget on February 1, though a final decision on timing will be made closer to the date.
A key feature of the mission is a high-level panel chaired by a cabinet minister and comprising senior bureaucrats, including the cabinet secretary.
Cutting Red Tape at the Core
The panel’s primary mandate will be to speed up regulatory approvals and reduce costs for large manufacturing projects. This includes faster land clearances, improved access to financing, and coordination with states to ensure reliable and affordable electricity supplies.
Manufacturing hubs have been selected based on existing infrastructure, geographic advantages, and proximity to ports, officials reportedly said.
India’s manufacturing ambitions have long been hampered by fragmented regulation. Labor laws and business compliance rules vary widely across states, raising costs for firms operating nationwide.
The new panel will work with state governments to streamline rules governing land, power, and water permits. It will also recommend reducing overlap between quality inspections and standards checks.
Officials said the panel would suggest aligning tariffs more closely with industry needs and what they described as national priorities.
For investors and manufacturers, the message is clear. India is shifting away from subsidy-driven growth toward a system built on scale, speed, and simpler rules. Whether that is enough to deliver a manufacturing breakthrough by 2035 will now be closely watched.
