
Chandrajit Banerjee: Manufacturing competitiveness can yield growth, jobs and resilience
India's strong fundamentals—a growing middle class, rising consumption, a rich resource base and a youthful workforce—create a solid foundation. Yet, despite this promise, manufacturing contributes only about 17% to gross value added (GVA) and employs just over 11% of the country's workforce. These figures underscore the urgency of scaling and strengthening India's manufacturing base.
Also Read: Manufacturing versus services: Why privilege one over the other?
To harness the sector's potential, we need to adopt a comprehensive strategy focused on competitiveness, innovation and sustainability. I would suggest a five-pillar strategy to strengthen India's manufacturing competitiveness.
My first suggestion is to empower the National Manufacturing Mission: This government initiative can be a game-changer. To unlock its full potential, the Mission should be operationalized as a cross-ministerial, action-oriented platform with clear objectives: to increase the share of manufacturing in GDP to 25%, expand merchandise exports to $1 trillion by 2030 and create jobs at scale. A three-tier governance model—providing strategic oversight, implementation support and outcome monitoring—can ensure its effectiveness.
The Mission should prioritize high-value and labour-intensive sectors, adopt cluster-based development and introduce a dedicated sub-mission for advanced manufacturing. This sub-mission would accelerate the adoption of technologies such as AI, IoT, robotics, additive manufacturing and nanotechnology, while promoting R&D, cross-sector integration and global collaboration.
Also Read: India's National Manufacturing Mission is just the catalyst this sector needs
Second, bridge the 'missing middle' with capital support: One of the persistent structural issues in Indian manufacturing is the 'missing middle'—a gap between large enterprises and micro firms. Mid-sized firms often lack access to growth capital, which stifles innovation and scalability. To address this, the government could launch a capital support scheme offering interest-free loans, and up to 50% of the equity capital for projects in the ₹50- ₹1,000 crore investment range. Loans could be repayable over five years after a moratorium of ten years.
Further, two fund-of-funds should be established—one focused on providing equity capital to small and medium enterprises and another on overseas technology acquisitions—drawing from the successful model used for startups. These funds would catalyse private investment and enable technology upgradation for globally competitive manufacturing.
Third, accelerate the construction of large-scale industrial infrastructure that's world-class: For this, it is essential to have a robust national framework for land acquisition that streamlines acquisition processes, ensures fair compensation, enables compliance with environmental norms and facilitates coordination among all stakeholders.
Also Read: Rahul Jacob: Manufacturing is crying out for a reality check
In tandem, India must build its next generation of smart industrial cities along major industrial corridors. Drawing on successful models such as Sri City in Andhra Pradesh and AURIC in Maharashtra, the government should partner with the private sector to develop 10 new cities equipped with modern infrastructure, logistics and digital utilities.
For faster development of the 12 smart cities already approved, an empowered group of ministers should be constituted with representation from central and state governments. A forward-looking national policy for private industrial parks—offering 'plug and play' infrastructure—can help scale up the effort to build large world-class parks that would attract both domestic and international manufacturers.
Fourth, lower logistics and power costs: High logistical costs severely impact export competitiveness. The Eastern and Western Dedicated Freight Corridors (DFCs) are welcome steps, but momentum must be sustained by fast-tracking the proposed East Coast, East-West and North-South DFCs. A world-class multimodal logistics network will improve turnaround times, reduce costs and attract global investors.
Similarly, rationalizing industrial power tariffs is crucial. Current high tariffs, driven by cross-subsidization and often arbitrary surcharges, hinder cost-efficiency. The Confederation of Indian Industry (CII) recommends implementing direct benefit transfers for subsidy-deserving consumers, with state governments funding these subsidies directly instead of doing it through distribution companies. Transparent tariff structures and reduced open-access charges will further improve reliability and investor confidence.
Also Read: Think ahead: India's electronics manufacturing must go up the value curve
Fifth, accelerate smart manufacturing and digital readiness: As the world moves towards Industry 5.0, India must build its capacity for smart manufacturing. CII proposes the creation of a National Digital Maturity Framework to guide businesses through the digital transformation journey—from foundational adoption to advanced integration.
In parallel, establishing Centres of Excellence for Skill Development in smart manufacturing across key industrial regions will help build a digitally skilled and future-ready workforce. These centres can bridge the talent gap in AI, robotics, automation and data analytics—critical for high-productivity, innovation-led growth.
Also Read: Time to re-imagine Indian manufacturing from the ground up
To conclude, India's inherent strengths—its demographic dividend, strong domestic demand and globally competitive sectors like pharmaceuticals, auto components and renewables—provide a compelling case for a manufacturing-led economic strategy. A bold and cohesive policy framework focused on technology adoption, capital access, industrial infrastructure and digital readiness will help realize India's manufacturing potential. Reaching $7.5 trillion in manufacturing output by 2047 is ambitious but achievable—and it can serve as a cornerstone for a $30 trillion economy by India's centenary.
We must unlock this opportunity not just to transform India's economic landscape, but also to secure its rightful place in the global manufacturing value chain.
The author is director general, Confederation of Indian Industry (CII).

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
&w=3840&q=100)

Business Standard
8 minutes ago
- Business Standard
SCL fabricates 20 indigenous semiconductor chips designed by students
36 more chips designed by students in the pipeline Aashish Aryan New Delhi Listen to This Article The Semiconductor Lab (SCL) at Mohali has completed the fabrication of 20 semiconductor chips designed by students from across 17 Indian engineering institutes, including the Indian Institute of Technology at Jammu and Indore, sources said. These chips are now ready for tape-out and will soon be tested, the sources told Business Standard. In addition to these, 36 more chips designed in India by students are at various stages of fabrication at SCL, and are likely to be ready for tape-out in the next six months, they added. SCL Mohali had started offering end-to-end fabrication, testing and packaging support for chip


India Today
8 minutes ago
- India Today
School assembly news headlines today- July 29: Top national, sports and world news curated for you
Here is the School Assembly News Update for July 29, 2025. This bulletin highlights significant national, international, and sports developments. It is aimed at keeping students informed and encouraging a regular habit of staying updated with current affairs. On July 29, 2025, many school students are preparing to present the news during their morning assembly. This daily routine not only helps them stay informed about major events in India and around the world but also improves their public speaking and confidence. To support their efforts, here are 12 important headlines covering national, international, and sports news: National News Parliament Monsoon session: After first week washout, Houses set for fiery debate on Pahalgam attack, Operation Sindoor After a week of disruptions, Parliament's Monsoon session is expected to see a heated debate from Monday (July 28, 2025) over the Pahalgam attack and Operation Sindoor. The ruling party and the Opposition are likely to clash over these key matters related to national security and foreign policy. 6 Dead, Several Injured In Stampede At Haridwar's Mansa Devi Temple Six people lost their lives and many others were hurt in a stampede at Mansa Devi temple in Haridwar, Uttarakhand. The incident happened on the stairs leading to the main temple. Police said the stampede may have started after rumours of possible electrocution caused panic among the devotees. Indian doctors use robot tech to operate on patients in Indore from 10,000 km away in France Indian doctors successfully carried out a gastric bypass and heart defect surgery on patients in Indore while attending a conference in Strasbourg, France - almost 10,000 km away. They used a made-in-India surgical robot to perform the operations in real time, with help from SS Innovations and Sri Aurobindo Institute of Medical Sciences (SAIMS) teams. India's 78% railway tracks upgraded to over 110kmph: Vaishnaw To bring high-speed trains and make travel safer, the Ministry of Railways has improved 78% of India's rail tracks to support speeds over 110 kmph by early 2025. Union Minister Ashwini Vaishnaw said that upgrades are happening all over the country. The total railway track length has grown from 79,342 km in 2014 to over 1 lakh km in 2025. World News Israel announces daily 10-hr humanitarian pauses in areas of Gaza The Israeli army said it will stop military action in crowded parts of Gaza for 10 hours each day to help deliver and share humanitarian aid. On Saturday, the Israeli Air Force dropped aid from the air for the first time, following government orders. This comes after Israel faced criticism for stopping aid from reaching Gaza. Attack on Indian man sparks calls for tougher laws in Melbourne The brutal attack on 33-year-old Saurabh Anand, who was badly injured and nearly lost his hand, has brought fresh attention to youth crime in Melbourne. The incident has led to calls for stricter bail rules and harsher punishments for violent crimes. Police have arrested four teenagers in connection with the attack, as concerns grow over the increase in knife-related violence in the city. Thai-Cambodia border clashes continue despite Trump's truce call Cambodia and Thailand both accused each other of firing artillery across their disputed border on Sunday. This happened just hours after US President Donald Trump said the two sides had agreed to try for a ceasefire. The fighting, now in its fourth day, has killed 33 people and forced over 1,30,000 people to leave their homes near the border. Russia cancels annual navy parade due to 'security reasons' Russia has called off its yearly navy parade due to "security reasons." Kremlin spokesperson Dmitry Peskov did not explain the exact threat but said it was because of the overall situation and that safety is the top priority. The parade, held every year on the last Sunday of July, is meant to honour the country's sailors. Sports News WUG 2025: Sahil Jadhav wins compound gold as Indian archers finish with 5-medal haul Indian archers had a great day at the World University Games on Saturday. Sahil Jadhav gave an almost perfect performance and won a gold medal. India won five medals in archery that day - gold in the mixed team event, silver in the men's team, bronze in the women's team, and two individual medals: Jadhav's gold and Parneet Kaur's silver. Shubman Gill becomes 3rd Indian in history to score 700 runs in a Test series Team India captain Shubman Gill is now the third Indian player to score over 700 runs in a single Test series. He reached this milestone during the second innings of the fourth Test against England in Manchester. Before him, only Sunil Gavaskar (who did it twice) and Yashasvi Jaiswal had achieved this record. Stokes creates history after scoring 100 and taking 5fer in Test England captain Ben Stokes has become the first from his country to score a century and take five wickets in the same Test match. He achieved this rare feat on day four of the fourth Test against India at Old Trafford in Manchester. He now joins legends like Imran Khan, Mushtaq Mohammed, Gary Sobers, and Denis Atkinson who have done the same. Messi and Alba suspended for one match for missing MLS All-Star Lionel Messi has been given a one-match suspension because he missed the MLS All-Star Game without getting permission in advance, the league announced on Friday (July 25, 2025). Students are advised to keep checking this page for the latest news information.


Time of India
22 minutes ago
- Time of India
Chandigarh Cong says no to India-Pakistan cricket matches
Times News Network Chandigarh: Chandigarh Congress on Sunday demanded that the central government not allow India-Pakistan cricket matches during the Asia Cup tournament at a neutral venue. The Congress said that people were upset with the agreement to resume cricket ties with Pakistan. "On the one hand, Operation Sindoor , initiated to teach Pakistan a lesson for its acts of terror, was not called off. On the other hand, the cricket boards of both countries decided to foster friendly sporting relations with each other. In such circumstances, India cannot play cricket matches with Pakistan. A huge amount of money invested by Indian sponsors will go to the coffers of the bankrupt Pakistani Cricket Board, which could be used to perpetrate further terror attacks in India," Congress said. MSID:: 122937247 413 |