Datanomics: India's manufacturing sector yet to show its strength

With US President Donald Trump reviving his tariff agenda and global supply chains under pressure, calls for bolstering domestic production through “Make in India” have resurfaced. Over the last decade, the Government has rolled out various initiatives, most notably the Production Linked Incentive (PLI) schemes, aimed at boosting manufacturing and creating a strong electronics ecosystem. While certain sectors such as smartphones have shown remarkable export growth, the broader manufacturing landscape does not tell an inspiring story.  

 

 

Yet to show strength 

 

Manufacturing’s share of GDP steady at 16–17 per cent before 2014, slipped to 13 per cent by 2019 and has remained stuck there despite Make in India push.  

 

Source: World Bank 

 

Wages and employment dissapoint   Make in India (2014–2025) has struggled to lift manufacturing output. Growth has been volatile with contractions in 2015-16, 2019-20, and the covid-hit year of 2020-21. Wages rose but inconsistently, and employment growth slowed— turning negative in 2020-21. The recent rebound may owe more to a low-base effect than a structural shift. 

    

PLI drives exports in some segments   PLI has been, though, making strides in different segments of manufacturing. For instance, smartphone exports rose from $10.9 billion in 2022-23 to $24.1 billion in 2024-25, driven by PLI incentives, supply chain shifts, and foreign investment. 

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