{"id":43563,"date":"2025-05-17T19:00:47","date_gmt":"2025-05-17T13:30:47","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=43563"},"modified":"2025-05-17T20:42:56","modified_gmt":"2025-05-17T15:12:56","slug":"manufacturing-mission-need-of-right-policy-intervention","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/editorial-analysis\/17-05-2025\/manufacturing-mission-need-of-right-policy-intervention","title":{"rendered":"Manufacturing Mission: Need of Right Policy Intervention"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/Indian Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Recently, the Union government moved to establish an inter-ministerial panel for <strong>drafting a National Manufacturing Mission<\/strong>, aiming to strengthen India&#8217;s manufacturing sector.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Manufacturing Sector in India<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>It encompasses industries engaged in the <strong>production, processing, and assembly of goods<\/strong>, contributing significantly to the country&#8217;s economic growth and employment.<\/li>\n\n\n\n<li>It includes textiles, electronics, automobiles, pharmaceuticals, chemicals, and renewable energy components.<\/li>\n\n\n\n<li>It currently contributes about <strong>17% to India\u2019s GDP<\/strong>, and aims to <strong>increase to 23%<\/strong> over the next two decades by focusing on sunrise sectors such as semiconductors, renewable energy components, medical devices, and batteries.\n<ul class=\"wp-block-list\">\n<li><strong>India&#8217;s GDP growth<\/strong> is projected at <strong>6.7% in FY26<\/strong>, surpassing global growth rates.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Issues and Concerns<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Structural Issues in Manufacturing:<\/strong> MSMEs in India struggle with formalization, limited access to credit, and regulatory hurdles, affecting their growth.\n<ul class=\"wp-block-list\">\n<li>Despite these efforts like <strong>National Manufacturing Policy (2011) and Make in India (2014)<\/strong>, manufacturing\u2019s contribution to GDP has remained at 15-17%.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Productivity and Competitiveness:<\/strong> India&#8217;s manufacturing exports lag behind Asian peers like Vietnam due to low productivity and inconsistent product standards.\n<ul class=\"wp-block-list\">\n<li>Technology adoption remains slow, limiting India&#8217;s ability to integrate into global supply chains.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Policy and Infrastructure Bottlenecks:<\/strong> High logistics costs and inadequate infrastructure hinder industrial expansion.\n<ul class=\"wp-block-list\">\n<li>State-level industrial policies are not fully aligned with national priorities, leading to uneven growth across regions.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Labour and Skill Development: <\/strong>Skill gaps in the workforce affect productivity, with a need for better vocational training.\n<ul class=\"wp-block-list\">\n<li>Labour-intensive industries like apparel, footwear, and furniture require targeted policy support to absorb surplus labour.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Clean-Tech and Sustainability Challenges:<\/strong> While India aims to scale up clean-tech manufacturing, challenges remain in solar PV cells, EV batteries, and wind-energy components.\n<ul class=\"wp-block-list\">\n<li>Carbon emissions from manufacturing pose environmental concerns, requiring better sustainability measures.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Related Initiatives &amp; Steps<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Production Linked Incentive (PLI) Scheme<\/strong>: It has been instrumental in transforming India&#8217;s manufacturing landscape, <strong>covering about 14 key sectors<\/strong> such as electronics, automobiles, pharmaceuticals, and textiles.\n<ul class=\"wp-block-list\">\n<li>It has led to \u20b91.5 lakh crore in investments and \u20b913 lakh crore in production value.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Make in India 2.0:<\/strong> It is focusing on 27 sectors to position India as a global manufacturing hub.\n<ul class=\"wp-block-list\">\n<li>It has helped India become the second-largest mobile phone manufacturer globally.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>National Manufacturing Mission:<\/strong> It was announced as part of the <strong>Union Budget 2025-26<\/strong> to strengthen India&#8217;s manufacturing sector<strong>, <\/strong>covering <strong>small, medium and large industries,<\/strong> emphasizing:\n<ul class=\"wp-block-list\">\n<li>Ease and cost of doing business<\/li>\n\n\n\n<li>Future-ready workforce development<\/li>\n\n\n\n<li>Revitalization of MSMEs<\/li>\n\n\n\n<li>Access to cutting-edge technology<\/li>\n\n\n\n<li>Production of globally competitive quality products.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Infrastructure and Logistics Development:<\/strong> The government has invested in <strong>industrial corridors, smart cities, and logistics improvements<\/strong> to enhance manufacturing efficiency.\n<ul class=\"wp-block-list\">\n<li>The <strong>National Infrastructure Pipeline (NIP) and National Monetization Pipeline (NMP)<\/strong> aim to modernize industrial infrastructure.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>FDI and Trade Policy Reforms:<\/strong> Over the last decade, total FDI inflows amounted to $709.84 billion, accounting for <strong>68.69% of the overall FDI<\/strong> inflow in the past 24 years.\n<ul class=\"wp-block-list\">\n<li>Policy measures such as GST implementation, corporate tax reductions, and streamlined regulatory processes have improved the business environment.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Focus on Clean-Tech Manufacturing:<\/strong> India is scaling up clean-tech manufacturing, focusing on solar PV cells, EV batteries, wind-energy components, and hydrogen technology.\n<ul class=\"wp-block-list\">\n<li>These efforts align with India&#8217;s climate goals and aim to reduce import dependence.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Learning from Others: Global Best Practices<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>China\u2019s Dual Circulation Strategy:<\/strong> It emphasizes self-reliance in critical tech and a strong domestic supply chain base.<\/li>\n\n\n\n<li><strong>Germany\u2019s Mittelstand Policy:<\/strong> It supports SMEs through innovation subsidies and export assistance.<\/li>\n\n\n\n<li><strong>Vietnam\u2019s SEZ Model:<\/strong> It offers tax incentives, simplified compliance, and strategic port access.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Way Forward<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Strengthening MSMEs for Inclusive Growth:<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>Access to Credit:<\/strong> Expanding the <strong>Credit Guarantee Scheme<\/strong> and introducing customized MSME credit cards with higher limits.<\/li>\n\n\n\n<li><strong>Simplified Compliance:<\/strong> Reducing regulatory burdens through single-window clearance and digitized approvals.<\/li>\n\n\n\n<li><strong>Technology Adoption: <\/strong>Subsidizing automation and digital tools to enhance MSME productivity.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Boosting High-Value Industries:<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>PLI Expansion:<\/strong> Extending PLI benefits to sunrise sectors like semiconductors, aerospace, and clean-tech manufacturing.<\/li>\n\n\n\n<li><strong>Global Supply Chain Integration:<\/strong> Strengthening export incentives and trade agreements to enhance India&#8217;s competitiveness.<\/li>\n\n\n\n<li><strong>Advanced R&amp;D Support:<\/strong> Increasing funding for innovation hubs and industry-academia collaborations.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Workforce Development and Skilling:<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>Vocational Training Expansion:<\/strong> Aligning skill development programs with industry needs.<\/li>\n\n\n\n<li><strong>Apprenticeship Incentives:<\/strong> Encouraging industry-led training for MSME workers.<\/li>\n\n\n\n<li><strong>AI &amp; Automation Upskilling:<\/strong> Preparing the workforce for next-gen manufacturing technologies.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Sustainable and Clean-Tech Manufacturing:<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>Green Manufacturing Incentives:<\/strong> Supporting solar PV, EV batteries, and hydrogen technology.<\/li>\n\n\n\n<li><strong>Circular Economy Policies:<\/strong> Encouraging recycling and waste reduction in production.<\/li>\n\n\n\n<li><strong>Carbon Neutrality Targets:<\/strong> Implementing low-emission industrial standards.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-background\" style=\"background-color:#fff2cc\"><tbody><tr><td><strong>Daily Mains Practice Question<\/strong><br><strong>[Q]<\/strong> In what ways can policy interventions effectively address the structural challenges in India&#8217;s manufacturing sector, and how should they be tailored to support both high-value industries and MSMEs?<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><a href=\"https:\/\/www.business-standard.com\/opinion\/editorial\/manufacturing-mission-the-sector-needs-the-right-policy-intervention-125051301751_1.html\" rel=\"nofollow noopener\" target=\"_blank\">Source: BS<\/a><\/p>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/www.nextias.com\/ca\/wp-content\/uploads\/2025\/05\/UPSC-Editorial-Analysis-17-May-2025.PDF.pdf\">Download PDF<\/a><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Recently, the Union government moved to establish an inter-ministerial panel for drafting a National Manufacturing Mission, aiming to strengthen India&#8217;s manufacturing sector.<\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[22],"tags":[],"class_list":["post-43563","post","type-post","status-publish","format-standard","hentry","category-editorial-analysis"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/43563","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=43563"}],"version-history":[{"count":2,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/43563\/revisions"}],"predecessor-version":[{"id":43611,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/43563\/revisions\/43611"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=43563"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=43563"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=43563"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}