Make in India at 12: Manufacturing Share Sees Little Change

Twelve years after the Make in India campaign began on September 25, 2014, available data across growth, investment, employment and exports shows that manufacturing has not materially increased its place in India’s economy, workforce or global export share.

The record is mixed rather than uniformly poor: recent government incentive schemes have delivered gains, but the source data shows those gains are concentrated in a few sectors.

What the 12-year review shows

The Make in India campaign was launched with Prime Minister Narendra Modi saying that “industrialists don’t come due to some fancy incentive scheme” but need a “development and growth-oriented environment”.

The data since then presents an important contrast: incentive schemes have shown some success, while broader indicators that would reflect a “development and growth-oriented environment” remain weak or uneven.

That distinction matters because the campaign was not framed only as a subsidy-led push, but the strongest results now visible in the data are linked to government incentive schemes rather than a broad-based transformation in manufacturing.

Across 12 metrics spanning growth, investment, employment and exports, manufacturing’s share in India’s economic growth, employment and global exports has stayed largely similar to where it was when the campaign began.

Growth: manufacturing has not consistently led the economy

On growth, the manufacturing sector has grown faster than the overall economy in five of the 12 years under consideration, based on the old series.

Under the new series, manufacturing has outpaced overall growth in all three years for which data is available, from 2023-24 to 2025-26.

However, the gap between manufacturing growth and overall growth under the new series is shrinking fast.

That makes the newer data less conclusive as evidence of a sustained manufacturing breakout, because the sector’s outperformance exists but is narrowing over the available three-year period.

The Index of Industrial Production gives a sharper picture of this limited outperformance.

Within the IIP, the manufacturing sector outpaced the overall index’s growth in only three of the 12 years, according to the old series of the index.

The new IIP series shows manufacturing growth was the same as overall index growth in 2023-24.

In the next two years, the new IIP series shows manufacturing grew slower than the overall index.

Together, the GVA growth data and the IIP data indicate that manufacturing has not consistently pulled ahead of the broader economy or broader industrial activity over the period under review.

Share in the economy: lower in old series, marginally higher in new series

The composition of the economy also shows limited change for manufacturing.

The older series of Gross Value Added data shows that manufacturing’s share in overall GVA is lower in 2025-26 than it was when Make in India was launched in 2014.

The new series gives a somewhat better picture, showing manufacturing’s share rising marginally from 14.6% in 2022-23 to 15.6% in 2025-26.

Even there, the increase is described in the source data as marginal rather than transformative.

This is central to assessing the campaign because a larger manufacturing share in GVA would have been one way to see whether the sector had gained structural weight in the economy.

Exports: value rose, global share stayed flat

India’s non-petroleum goods exports increased in value over the period.

They grew 53% to $388.3 billion in 2025-26 from $253.5 billion in the year the Make in India campaign was launched.

However, the earlier 12-year period saw non-petroleum goods exports grow more than 400%, though from a much smaller base.

The source data notes that the base effect explains only some of this difference in export growth.

The broader global comparison is less encouraging for India’s export share.

UNCTAD data shows India’s share in global merchandise exports rose from around 0.8% in 2002 to 1.7% in 2013.

That share remained at 1.7% even in 2025-26.

This means the value of non-petroleum goods exports rose, but India did not increase its share of global merchandise exports from the level reached before the Make in India launch.

Investment: private capital response remains subdued

Private-sector capital formation is another weak point in the 12-year picture.

Gross fixed capital formation by the private sector, a measure of its spending on real asset creation, formed a lower share of GDP in 2023-24 than it did in 2014-15, according to the old series.

The new series also shows GFCF as a percentage of GDP has been falling since 2022-23.

This matters because higher spending on real asset creation would have indicated stronger private investment in future production capacity.

Foreign direct investment presents a more mixed result.

FDI growth to the manufacturing sector was slower than overall FDI growth in seven of the 12 years under consideration.

At the same time, manufacturing’s share in overall FDI increased from nearly 48% in 2014-15 to 55% in 2025-26.

So, manufacturing gained share within overall FDI, but its FDI growth underperformed overall FDI growth in a majority of the years reviewed.

Capacity use and credit: factories below the investment trigger

The Reserve Bank of India’s data on capacity utilisation shows that factories have been used more intensively over the last few years.

Even so, capacity utilisation remains below the 80% mark that is considered the limit after which companies invest to create new capacity.

This suggests that factory usage has improved, but not to the level generally associated with a fresh capacity-creation cycle.

RBI data also shows that bank credit to industry has been growing strongly over the last few years.

That increase has been especially led by credit to micro, small and medium enterprises.

However, experts have pointed out that, without sustained rapid growth in output, such loans are likely being used to provide working capital rather than for fresh investments.

This makes the credit growth less clear as evidence of a major new investment cycle in manufacturing.

Incentive schemes: success, but concentrated

The clearest positive results come from the government’s Production-Linked Incentive schemes.

The 14 schemes, launched across 2020 and 2021, resulted in cumulative investment of Rs 2.4 lakh crore as of March 2026.

But the data also shows that this investment performance is highly concentrated.

The top five sectors under the schemes are solar modules, pharmaceutical drugs, automobiles and their components, specialty steel, and large-scale electronics manufacturing.

Together, these five sectors account for nearly 83% of all investment under the PLI schemes.

This concentration is significant because it shows the schemes have delivered results, but not evenly across all covered sectors.

The pattern supports the broader finding that incentive-led gains have appeared in a handful of sectors, rather than across manufacturing as a whole.

Employment: limited change in manufacturing’s overall share

The employment impact of the incentive schemes is also concentrated by sector.

Food products, large-scale electronics manufacturing, pharmaceutical drugs, automobiles and their components, and white goods cumulatively accounted for more than 86% of the 8.5 lakh people employed under these schemes.

The government says three sectors, large-scale electronics manufacturing, IT hardware, and solar modules, have resulted in an additional 5.7 lakh of indirect employment.

Broader manufacturing employment has grown, but not dramatically.

Data sourced by CMIE from the Ministry of Labour and Employment shows that the total number of people employed in manufacturing rose from 5.1 crore in 2016-17 to 5.3 crore in 2025-26.

Manufacturing’s share in total employment was largely the same in 2025-26 as it was a decade earlier.

That flat share is important because it shows that manufacturing has not become a substantially larger employer within the economy, even as sector-specific schemes have generated employment in selected areas.

The overall picture

The 12-year data does not show a broad-based manufacturing surge across growth, exports, investment and employment.

It shows rising non-petroleum export value, a higher manufacturing share in overall FDI, and measurable investment and employment under the PLI schemes.

It also shows that manufacturing’s share in economic growth, employment and global exports has remained largely unchanged since the campaign began.

The central conclusion from the available data is therefore not that Make in India produced no gains, but that the gains have been limited and uneven.

The strongest measurable successes are linked to incentive schemes, while broader indicators of a manufacturing-led transformation remain underperforming.

Source: The Hindu