New Delhi: India needs to sharply expand its manufacturing scale, improve competitiveness and move deeper into global value chains if it wants to emerge as a global manufacturing hub, according to a new NITI Aayog report released Thursday.
The report, titled ‘Key sectors to Position India as a Global Manufacturing Hub Volume-1’, noted that India’s manufacturing sector accounts for 17.5 percent of its gross value added (GVA), a share that has remained broadly stagnant at around 16-18 percent for the past two decades. GVA is the measure of the total value of goods and services which is produced in a country’s economy.India’s share in global manufacturing value grew from about 1.5 percent in 1995 to only 3.2 percent in 2023. In contrast, China’s share has increased from about 5 percent to nearly 32 percent during the same period.
The report said India has an opportunity to close this gap as global companies are now diversifying supply chains and seek alternatives to concentrated manufacturing locations. But the report also cautioned that the country cannot rely only on expanding production or assembly. It needs to build scale, raise productivity, develop technological capabilities and increase its presence in global production networks.“It’s about building productive capacity, increasing productivity, improving competitiveness and expanding India’s presence in global markets,” NITI Aayog vice chairman Ashok Kumar Lahiri said at the launch of the report.NITI Aayog in collaboration with Crisil Intelligence, assessed 62 manufacturing sectors and identified 12 with the potential that could help India in emerging as a global leader. Some of the manufacturing sectors identified are automobiles, chemicals, capital goods, electronics, pharmaceuticals, defence and drones, food processing, textiles, steel, leather and footwear, telecom equipment, and solar PV manufacturing.The first volume of the study examines four of these sectors (chemicals, textiles, telecom and network equipment, and solar PV manufacturing) and outlines sector-specific measures to address their challenges. The remaining eight sectors will be covered in subsequent volumes.Where India has an opportunity
