Make in India Initiative

Launched on September 25, 2014, by the Ministry of Commerce and Industry, the “Make in India” initiative is a comprehensive national program designed to transform India into a global design, innovation, and manufacturing hub. Managed administratively by the Department for Promotion of Industry and Internal Trade (DPIIT), the program targets core structural gaps in the secondary sector of the Indian economy.

• Manufacturing Growth Rate: Target an annual growth rate of 12–14% in the manufacturing sector.
• GDP Contribution: Elevate the manufacturing sector’s share in Gross Value Added (GVA) / GDP to 25%.
• Employment Generation: Create 100 million additional formal manufacturing jobs in the economy.
• Global Export Competitiveness: Enhance domestic value addition to deepen integration with Global Value Chains (GVCs).

Evolution to Make in India 2.0

The strategy transitioned into Make in India 2.0 to address emerging industrial requirements, focusing on 27 priority sectors. These are divided into 15 manufacturing sectors overseen by DPIIT and 12 service sectors coordinated by respective ministries.

The Four Core Pillars of the Initiative

New Processes

This pillar targets institutional de-regulation to minimize compliance costs and improve transaction speeds throughout an enterprise’s lifecycle.

• National Single Window System (NSWS): A unified digital platform integrating central and state-level clearances, eliminating physical inter-ministerial friction.
• Ease of Doing Business (EoDB) Reforms: Simplification of complex regulatory procedures, which contributed to India’s rise from 142nd (2014) to 63rd (2020) in the World Bank’s Doing Business Report.
• Commercial Courts Act: Enacted to expedite commercial dispute resolutions and improve contract enforcement timelines.

New Infrastructure

This pillar focuses on creating integrated, multi-modal industrial ecosystems supported by advanced logistics.

• National Industrial Corridor Development Programme (NICDP): Oversees the development of 11 distinct industrial corridors. Four smart industrial cities (Dholera, AURIC, Greater Noida, and Vikram Udyogpuri) have completed initial phases, drawing over US20.6 billion in investments. </li> <li> <b>PM GatiShakti National Master Plan:</b> A digital GIS-mapping platform integrating 16 central ministries to coordinate spatial planning for multi-modal connectivity projects. </li> <li> <b>India Industrial Land Bank (IILB):</b> A GIS-enabled platform providing real-time tracking of available industrial plots, connectivity metrics, and raw material proximity across states. </li> </ul> <h5>New Sectors</h5> <p> This pillar drives the strategic liberalization of Foreign Direct Investment (FDI) equity caps alongside enhanced domestic manufacturing targets. </p> <ul> <li> <b>Defence Sector:</b> Automatic route FDI raised to 74%; up to 100% permitted via the government route for modern technology access. </li> <li> <b>Railways Infrastructure:</b> Opened to 100% FDI under the automatic route for high-speed tracks, suburban corridors, and dedicated freight lines. </li> <li> <b>Space Sector:</b> Liberalized caps allow up to 74% in satellite manufacturing and 49% in launch vehicle development under the automatic route. </li> </ul> <h5>New Mindset</h5> <p> This pillar marks an institutional shift in the government’s approach to the private sector. </p> <ul> <li> <b>Shift from Regulator to Facilitator:</b> Reorients bureaucracy from a legacy policing mindset to that of a developmental partner. </li> <li> <b>Dedicated Handholding Bodies:</b> Establishes specific institutional Desks (e.g., Invest India, Japan Plus, Korea Plus) to handle sovereign capital and fast-track clearance bottlenecks. </li> </ul> <h4>Key Strategic Fiscal and Policy Enablers</h4> <h5>Production Linked Incentive (PLI) Schemes</h5> <p> The PLI scheme serves as India’s primary fiscal mechanism to offset domestic structural disadvantages. It offers 4% to 6% financial incentives on incremental sales of items manufactured in domestic units over a designated base year. </p> <ul> <li> <b>Sectoral Coverage:</b> Deployed across 14 frontline sectors, including Advanced Chemistry Cell (ACC) Batteries, Electronics/IT Hardware, Automobiles, Pharmaceuticals, Specialized Steel, and Solar PV Modules. </li> <li> <b>Realized Outcomes:</b> Attracted over ₹2.16 lakh crore in actual private investments, driving an incremental production value of ₹20.41 lakh crore and generating over 14.39 lakh formal jobs. </li> </ul> <h5>Fiscal and Financial Support Instruments</h5> <ul> <li> <b>Corporate Tax Rationalization:</b> Reduced the base corporate tax rate to 15% for newly incorporated domestic manufacturing companies, establishing tax parity within the ASEAN region. </li> <li> <b>Self-Reliant India (SRI) Fund:</b> A ₹50,000 crore daughter-fund structure set up to infuse equity capital into viable MSMEs, supported by an additional ₹2,000 crore allocation to sustain access to formal risk capital. </li> <li> <b>Emergency Credit Line Guarantee Scheme (ECLGS):</b> Provided fully guaranteed, collateral-free operational liquidity to protect manufacturing MSMEs from global supply chain shocks. </li> </ul> <h4>Empirical Achievements and Impact Assessments</h4> <h5>Macro-FDI Inflows</h5> <p> The programmatic push under Make in India catalyzed a significant increase in capital inflows. Cumulative FDI equity inflows into India between 2000 and 2025 crossed US 1.05 trillion, with Gross FDI for a single financial year hitting US$ 81.04 billion. Manufacturing-specific FDI expanded at a 69% cumulative growth rate over the decade.

  Sectoral Breakthroughs

  Electronics System Design & Manufacturing (ESDM)

  • Mobile Manufacturing: India advanced to become the second-largest global manufacturer of mobile devices by volume. Domestic demand satisfaction reached 99.2%, shifting the country from an import-dependent market to a major exporter.
  • Export Scaling: Smartphone export volumes surpassed 22.88 million units in the first half of a single fiscal cycle, accompanied by a 77% drop in the import value of completely built units (CBUs).
  • Telecom Networking: Tripled component exports driven by local manufacturing arrangements with global OEMs (e.g., Nokia, Cisco, Ericsson).

  Defence and Heavy Engineering

  • Export Performance: Indian defence exports surged over 34-fold within a decade, driven by domestic production of platforms like LCA Tejas, BrahMos missiles, and Advanced Light Helicopters (ALH).
  • Heavy Locomotive Systems: The Marhowrah Diesel Locomotive Factory in Bihar established an export footprint, supplying Evolution Series ES43ACmi locomotives to international infrastructure markets, including Guinea’s Simandou iron ore project.

  Pharmaceuticals and White Goods

  • Global generic supply: Reached the position of 3rd largest producer by volume globally, supplying 40% of US generic demand and 50% of global vaccine needs.
  • Component Localization: White Goods (Air Conditioners and LED components) raised their domestic value addition (DVA) from 20% to 55% via localized compressor and circuit board assembly tracks.

  Structural Bottlenecks and Policy Challenges

  Missing Middle Phenomenon

  The manufacturing sector continues to face an asymmetric structure characterized by a “missing middle.” While micro-enterprises dominate by volume, capital-intensive large firms dominate total output. Medium enterprises remain underrepresented, as small units often deliberately limit expansion to avoid crossing regulatory thresholds that trigger additional compliance mandates.

  Logistics and Factor Cost Hardships

  India’s domestic logistics costs hover around 13–14% of GDP, compared to the 8–9% average found in advanced manufacturing nations like Germany or Japan. High land acquisition costs, complex conversion processes, and industrial power tariffs further increase input costs, reducing the price competitiveness of Indian goods in international markets.

  Sub-Optimal R&D and Intellectual Property Reinvestment

  Gross Expenditure on Research and Development (GERD) in India remains low at approximately 0.65% of GDP, contrasted with 2.4% in China and over 3% in the United States. Private sector contribution to corporate R&D is limited, leaving Indian manufacturing dependent on imported capital machinery, advanced semiconductors, and active chemical ingredients (APIs).

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  Last Modified: May 15, 2026