India's National Manufacturing Mission is just the catalyst this sector needs

Mint

2 hours ago

India's National Manufacturing Mission (NMM), announced in the Union budget this year, was much awaited. While the sector has grown over the years in size, its contribution to our economy has not gained share. The need to increase manufacturing as a proportion of GDP has always been emphasized and this mission-mode approach announced by the government should make a difference.
An ambitious, empowered and inclusive framework is expected to be the hallmark for this mission. It must target a share of at least 12% in global manufacturing output for India, as against the current 3%. Let me share a few thoughts on a framework that could help propel India as a manufacturer.
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The first aspect is the structure of the mission, which could determine the success or failure of the initiative. The NMM can consider a three-tier structure. At the initial level, the government could consider having inter-ministerial task-forces. These should focus on the five key areas spelt out by the finance minister in her budget speech for 2025-26: namely, the ease of doing business; a future-ready workforce; micro, small and medium enterprises (MSMEs); technology adoption; and quality. These five task-forces could be under the concerned ministries with various stakeholders as members. They should recommend policies, propose roadmaps and drive implementation.
The NMM could be headed by a senior industry leader. This can be the second tier. Its main members could be secretaries of key government departments related to manufacturing; they can provide policy and strategic direction. In addition, CEOs from industry associations could be members, while state chief secretaries can be special invitees. This high-level private-public partnership model will be crucial for driving this mission.
At the pinnacle of this structure could be a high-level committee headed by the Prime Minister. Its members could be the NMM chairperson, finance minister, commerce and industry minister, cabinet secretary and a representative of the Niti Aayog. This three-tier structure, in our view, would be inclusive and empowered to drive reforms and take the steps required to achieve our goals.
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The second aspect is whether the NMM should have a sectoral focus or address sector-agnostic issues. In this, the Federation of Indian Chambers of Commerce and Industry (Ficci) has suggested that its dominant focus should be on sector-agnostic areas, like regulatory reforms, cost competitiveness, the overall investment climate, skilling, quality, productivity and the like.
The mission should also make strategic interventions in frontier-technology fields—such as electronics, batteries, defence, space, renewables, AI, quantum computing, etc—by boosting domestic design capability and value addition. Last year, the government announced an allocation of ₹1 trillion to encourage research and development (R&D) in sunrise domains by the private sector. We need to leverage this fund now to take a lead in the frontier technologies.
The NMM's priorities are the third aspect. A sine qua non list would include macro-level policies, be it logistics, monetary, fiscal, tariffs or trade. These should be fully aligned with the mission's needs. It would also cover technology, which needs to be the key driver of manufacturing. A focus on value addition by way of design, key components and so on must also feature as a priority. So also export competitiveness, global value chain integration and import substitution in critical areas of dependency.
As its fourth aspect, the mission will lay emphasis on MSMEs, which have been the main driver of manufacturing growth in several countries.
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Ficci has suggested six areas of intervention: Training for MSME promoters to grow into mid-sized or large firms in the future; an impetus to family-owned businesses; the development of urban MSME zones, non-polluting MSME malls or urban industrial clusters within city limits to reduce logistical costs and enhance market access for small enterprises; support for environment, social and governance capacity among MSMEs; a catalyst for digital adoption across MSMEs to drive efficiency and growth; and light-touch regulations for three years for MSMEs in strategic areas to help them take off.
For India to become a global manufacturing powerhouse, quality cannot be ignored. The mission should collaborate with industry consortiums to set Indian standards and India should take an active part in such processes at international standard-setting bodies. We need to promote and push Indian standards alongside our exports.
Apart from the NMM, a high-level committee for regulatory reforms was also announced by the government. Ficci has suggested some broad terms of reference for its institutional structure, urging the adoption of a regulatory impact assessment framework to ensure transparent and consistent policy implementation across regulators.
Overall, the two structures should lead to seamless communication and interaction between all stakeholders at every level—from central and state functionaries to experts and leaders of academia and industry—with everyone focused on one mission: manufacturing.
The author is president, Federation of Indian Chambers of Commerce and Industry.