India must build materials, tech capability to scale manufacturing: Experts

At BS Manthan, industry leaders highlight gaps in advanced materials, R&D, and minerals, even as policy support, global shifts, and investor confidence create new momentum for manufacturing growth

India’s manufacturing sector, which currently accounts for about 17 per cent of gross domestic product (GDP), is entering a phase where the focus is shifting from assembly and scale to technology ownership, materials capability, and supply chain resilience, industry executives said at the Business Standard Manthan event in New Delhi on Wednesday.

 

Executives from Rolls-Royce, Midwest, and Mashreq India said policy support, global supply chain realignment, and investor confidence are creating opportunities. But gaps remain in advanced materials, intellectual property (IP) ownership, and access to critical minerals.

 

Abhishek Singh, senior vice-president- defence (India & Southeast Asia), Rolls-Royce, said increasing manufacturing’s share to 25 per cent of GDP is critical because of its economic and strategic benefits. “Getting to 25 per cent is going to be really important, because we all know what manufacturing really brings,” he said, citing multiplier effects, jobs, and supply chain stability.

 

 

He added that manufacturing is also about “national security resilience” and “strategic autonomy", especially given geopolitical shifts.

 

Why is self-reliance in materials and technology becoming critical?

 

The disruptions of the past year exposed vulnerabilities in global supply chains and highlighted the need to build domestic capabilities, particularly in high-technology manufacturing.

 

Kollareddy Ramachandra, chief executive officer of Midwest, said countries could earlier rely on global supply chains, but that model has strained. “For the first time, we have seen in the last 12 months, specifically, that it might not work all the time,” he said.

 

He stressed the importance of building know-how in refining and purifying materials rather than just extracting minerals. “The value is not in the mineral, but the process and the know how to get the required purity,” he said.

 

India has about 100,000 startups, but fewer than 50 are focused on advanced materials, which he said needs to change for India to gain an edge in high-tech manufacturing.

 

Kollareddy also pointed to rare earth minerals as a major opportunity. India currently produces about 500 tonnes of rare earth oxides, compared to China’s 60,000 tonnes, while global demand stands at about 75,000 tonnes and is rising. “If you’re asking whether India can take 25 per cent of the global market share, yes it can and sustain for the next 50 years,” he said.

 

Global companies moving up the value chain in India

 

Executives said India’s manufacturing ecosystem has evolved from basic assembly to more complex and technology-intensive production.

 

Singh said Rolls-Royce began in India with assembly and testing of aero gas turbines but has since moved into more complex manufacturing and co-development. “Now the model that we are following is about co-creation in India, where the IP is owned by India,” he said.

 

He added that manufacturing in India has progressed from simple machining to complex, high-temperature components, supported by state governments through land allocation and skilling initiatives.

 

How policies and finance are enabling manufacturing growth

 

Banking and policy support are helping strengthen the manufacturing ecosystem, said Tushar Vikram, chief executive officer and country head, Mashreq India.

 

He cited government initiatives such as the production-linked incentive (PLI) scheme, National Manufacturing Policy, and Gati Shakti programme as key drivers. He also pointed to India’s labour force, data ecosystem, and government push under the Viksit Bharat programme as enablers.

 

Ramachandra said while schemes such as PLI have helped accelerate adoption and scale, research and development incentives are needed. “You can’t keep churning a technology every five, six years, unless it’s your own,” he said.

 

How foreign investors view India amid global turbulence

 

Despite global uncertainty, executives said India remains an attractive destination for investment in manufacturing.

 

Vikram said global investors continue to see India as a reliable sourcing destination. “It is a turbulent time for the world, but India has been relatively better placed,” he said, adding that India’s governance, legal framework, and policy direction are encouraging global investors.