Make in India at 12: Patchy Manufacturing Performance

Context: Manufacturing Growth - Limited Structural Gains

Launched on 25 September 2014, Make in India aimed to strengthen manufacturing, investment, employment and exports.
An assessment across 12 indicators suggests that manufacturing has not yet materially increased its contribution to:

Under the older GDP series, manufacturing grew faster than the overall economy in only half of the 12 years.
Under the newer series, manufacturing outpaced overall economic growth in all three available years (2023–24 to 2025–26), although the growth differential has been narrowing.
Index of Industrial Production (IIP): Manufacturing outpaced overall IIP growth in only 3 of the 12 years under the old series; under the new series, manufacturing growth was equal to overall IIP growth in 2023–24 but slower in the following two years.

The older GVA series indicates that manufacturing’s share in total GVA in 2025–26 is lower than when Make in India was launched.
Under the new series, manufacturing’s GVA share increased marginally from 14.6% in 2022–23 to 15.6% in 2025–26.
Non-petroleum goods exports increased from $253.5 billion in 2014–15 to $388.3 billion in 2025–26, a rise of about 53%.
However, non-petroleum exports had grown by more than 400% during the preceding 12 years, albeit from a much smaller base.
India’s share in global merchandise exports remained around 1.7% in 2025–26, compared with around 1.7% in 2013, despite the expansion in absolute exports.
Private Gross Fixed Capital Formation (GFCF):

Its share of GDP in 2023–24 was lower than in 2014–15 under the old series.
The new series also shows a decline in GFCF as a percentage of GDP since 2022–23.

This points to continued weakness in private investment and capacity creation.

Manufacturing FDI growth was slower than overall FDI growth in 7 of the 12 years examined.
Manufacturing’s share of total FDI nevertheless increased from nearly 48% in 2014–15 to 55% in 2025–26.
Capacity utilisation, as measured by RBI data, has gradually improved but remains below the 80% level generally associated with stronger incentives for companies to undertake fresh capacity expansion.
Bank credit to industry has increased strongly in recent years, particularly credit to micro, small and medium enterprises (MSMEs).
However, the article notes that without sustained rapid growth in industrial output, higher credit may indicate greater financing of working capital rather than fresh productive investment.

The Production-Linked Incentive (PLI) schemes were introduced across 2020–21 in 14 sectors to promote domestic manufacturing and attract investment.
By March 2026, the schemes had generated cumulative investment of around ₹4 lakh crore.
However, benefits remain highly concentrated:

These five sectors together account for nearly 83% of total investment generated under the PLI schemes.
Thus, PLI has demonstrated the potential of targeted industrial policy, but the gains have not yet translated into broad-based manufacturing expansion across sectors.

The evidence presents a mixed picture: India has recorded gains in selected manufacturing sectors, FDI share and PLI-supported investment, but broader structural indicators remain less encouraging.
Key concerns include:

Limited increase in manufacturing’s share of GVA.
Weak improvement in India’s share of global merchandise exports.
Declining private investment intensity.
Capacity utilisation remaining below the threshold associated with new capacity creation.
Concentration of PLI investment in a few sectors.

The central challenge for the next phase of Make in India is to move from incentive-led, sector-specific gains to broad-based manufacturing competitiveness, sustained private investment, higher productivity and deeper integration into global value chains.