How advanced manufacturing can define India's global manufacturing rise

India's rise in global manufacturing will be driven by innovation-first businesses, policy alignment, and closing the talent gap

India is steadily advancing toward becoming a global manufacturing powerhouse. The sector has undergone rapid transformation—driven by cutting-edge technology, skilled talent and strong policy support. Contributing 17 per cent to the nation’s GDP and employing over 27.3 million people, manufacturing is a vital pillar of the economy.

 

By FY30, the sector is expected to nearly triple, reaching $1.30 trillion with an 18 per cent CAGR. Our share in global goods exports is set to grow from 1.7 per cent today to almost 3 per cent by the decade’s end.

 

This growth is not fuelled by low-cost labour but by home-grown R&D, advanced automation and system-level innovation. Geopolitical shifts are also reshaping the global supply chain landscape. As dependence on China decreases, India’s share of US imports rose from 2.3 per cent in 2019 to 2.8 per cent in 2022, while China’s fell from 18.1 per cent to 13.4 per cent. Global giants such as Apple, Samsung, Foxconn and Micron are increasingly anchoring production in India.

 

 

Policy momentum

 

Government initiatives are adding further impetus, with over $25 billion in Production-Linked Incentives (PLIs) across nine sectors. Manufacturing is now recognised as a strategic priority—both for national security and to strengthen India’s global standing. Flagship initiatives like Make in India and PLIs have galvanised private sector participation and boosted domestic manufacturing capacity.

 

Initiatives in areas such as semiconductors, battery storage, green hydrogen and defense procurement signal India’s readiness for industrial transformation.

 

New initiatives in semiconductors, battery storage, green hydrogen and defence procurement signal India’s readiness for industrial transformation. The government’s emphasis on green and sustainable production is also enhancing India’s competitive edge on the global stage, especially as B2B buyers, consumers and investors place greater value on environmentally responsible sourcing and operations.

 

Importance of skilling for scale

 

India produces more than 1.5 million engineers annually, the highest in the world. With a median age of just 28 and strong English proficiency, the talent base is strong. However, gaps remain between education and industry needs—especially in areas critical to advanced manufacturing, such as R&D, automation and systems integration.

 

This gap is beginning to close through government-led skilling missions, private collaborations and a growing innovation-driven engineering mindset. When the capability and industry needs align, India delivers manufacturing excellence at a global scale. Fully unlocking India’s engineering talent will be central to India’s rise as a manufacturing powerhouse.

 

Where venture meets industry

 

As a venture investor focused on early-stage innovation, I am seeing a new kind of industrial startup emerge—lean, IP-driven and ambitious. Today’s manufacturing startups do not resemble traditional factories-they resemble deep tech labs with a mission. These are not companies focused on merely assembly-they are engineering first organisations designing the future of how things are made.

 

We have found it helpful to classify advanced manufacturing startups into three archetypes:

 

Process innovators: These startups harness AI, chemistry and software to reimagine manufacturing methods from real time sensor- driven production to waste-free continuous flow chemistry.

 

Equipment-led innovators: Companies creating the next generation of proprietary tools, platforms, or materials that unlock new capabilities. Think of automation systems, precision actuators or novel raw material formulations–the modern day picks and shovels of industry

 

Product-led innovators: Startups pushing the envelope on products through new form factors, embedded firmware or India specific durability–without overhauling the core production.

 

Across our portfolio, Scimplify, ElementRe, Unmand: We are seeing these models come alive. These startups are solving deep, system- level challenges that require original intellectual property. In doing so, many are not just catching up legacy players- they are leapfrogging them. According to Bain & Company’s 2025 India Advanced Manufacturing Outlook, over $12 billion in early-stage private capital has flowed into deep-tech manufacturing startups between 2020 and 2025, a 4x increase over the previous five years. This surge signals rising investor confidence in IP-led, high-value manufacturing plays.

 

Five bets where India will win

 

Electronic and electricals: The sector is set to triple from $200 billion to over $600 billion by 2030, powered by mobile device, manufacturing, defence localisation and surging export. The PLI scheme has already catalysed over ₹14 lakh crore (around $ 162.84 billion) in output, signalling strong momentum.

 

Aerospace and defence: With Make in India mandate and growing demand for dual-use technologies such as drones, anti drone systems and simulators, the sector is tapping into a $16 trillion + global pipeline. Companies like Zen Technologies and Solar Industries are now clocking gross margins of over 70 per cent.

 

Automotive: EV componentry, embed software and precision mechatronics are reshaping India’s automotive exports. Companies like Minda are building IP-led systems for next-gen vehicles, positioning India as a future-forward auto innovator.

 

Chemicals: Process-led innovation is helping Indian players like Deepak Nitrite serve high purity verticals in electronics and pharma through technologies like continuous flow reactors. This move up the value chain is earning them premium market valuations.

 

Medical devices: Advancements in automation and micro-moulding are enabling world-class surgical-grade production. Firms like Poly Medicure boast gross margins of 67 per cent, proving that world-class quality can be made in India.

 

These aren’t low-margin, commoditised plays. They are innovation-first businesses built on real IP-where India’s domestic demand and global aspirations converge.

 

The decade is ours to claim

 

This is more than just a moment for manufacturing-it is an inflection point for industrial reinvention. With the right alignment of capital, talent and policy, India can become the world’s industrial backbone. As the fastest growing major economy, India must now chase its next economic identity and earn the label of a global manufacturing powerhouse. If we execute well, we will not just participate in the future of global manufacturing, we will help define it. 

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The author is Partner at Accel, a global venture capital firm based with its headquarters in Palo Alto, California

 

(Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper)