India report: Overall competitiveness of manufacturing industry still insufficient
Recently, Indian Prime Minister Modi once again put forward the slogan of achieving the goal of "developed countries" by 2047, and regarded manufacturing as an important pillar to promote economic development. In this context, the current development status of India's manufacturing industry has once again attracted attention. A latest report released by the National Transitional Council of India shows that in the past 20 years, the proportion of India's manufacturing added value to the overall economic added value has been about 17.5%, maintaining between 16% and 18% for a long time without achieving significant growth.
On August 15th, Independence Day, Modi delivered a speech at the Red Fort in Delhi, reaffirming his commitment to building India into a "developed country" by 2047, the centenary of independence. He listed manufacturing as a key development direction, with the goal of building India into a manufacturing base that is competitive in terms of cost, quality, and scale.
In recent years, India has continued to promote policies such as "Made in India" and "Production Linked Incentive Program" to enhance local manufacturing capabilities. Modi stated that in the past 12 years, the production scale of handmade textiles and rural industries in India has increased fivefold, and the scale of electronic manufacturing has grown sevenfold.
However, the continuous expansion of the manufacturing industry has not completely changed the current situation where the overall competitiveness of India's manufacturing industry is still insufficient. According to the report "Key Industries to Build India into a Global Manufacturing Center (Volume 1)" released by the National Transitional Council of India on August 13, cited by the New India Times on the 16th, the proportion of India's manufacturing industry to its overall economic value added has been hovering between 16% and 18% for the past 20 years. In addition, the gap between India and major manufacturing countries is even more pronounced. The report lists data that in 1995, China's manufacturing added value accounted for about 5% of the world's total, while India accounted for about 1.5%; By 2023, China's share has risen to about 32%, while India's is only 3.2%.
The report selected 12 key industries from 62 manufacturing sectors, covering chemical, textile, telecommunications equipment, photovoltaic and other fields, and believes that these industries are expected to become important directions for upgrading India's manufacturing industry.
The report believes that the problems faced by India's manufacturing industry are not the shortcomings of a single industry, but rather the different constraints that exist in different industries in terms of raw material supply, technological capabilities, infrastructure, financing conditions, and supply chain integration.
In the field of telecommunications and network equipment, between 2020 and 2024, India's annual exports of telecommunications equipment amounted to only $600 million to $1 billion, while imports reached $4 billion to $5 billion. The photovoltaic industry is facing the same dilemma. In recent years, India has vigorously promoted the expansion of solar energy manufacturing and made progress in module and battery manufacturing. However, the report points out that the overall strength of India's photovoltaic industry chain is still weak, and key raw materials such as polysilicon still rely on overseas supply.
This issue is also reflected in trade data. Official data shows that in July 2026, India's trade deficit increased by 31.5% year-on-year, reaching $15.03 billion. Among them, the export volume increased by 13.3% to reach 80.014 billion US dollars, but the import volume grew even faster, increasing by 15.8% to reach 95.06 billion US dollars.
According to a recent article in India's Business Today, India has expanded its assembly business, but due to the continued reliance on imported key components, most of the added value remains outside of India. The article cites data stating that the import of industrial products in India has increased by 217% in the past 15 years. This makes India increasingly a major importer and consumer market for industrial products, rather than an important producer of these products. The article states that for India, the next real challenge is to shift from expanding production scale to building a complete industrial ecosystem, filling in links such as land, logistics, skilled personnel, suppliers, and financing, while reducing manufacturing costs and increasing support for downstream manufacturing.