Boosting India's Manufacturing: NITI Aayog's New Mission
NITI Aayog's Vice Chairperson, Suman Bery, has recently highlighted the critical need for reforms in India's manufacturing sector to boost its share in the country's gross domestic product (GDP). The Cabinet is currently preparing a note for the National Manufacturing Mission (NMM), which aims to enhance supply chain development and skill ecosystems that can help small enterprises scale and integrate into global production networks.
Over the last decade, India has made significant strides in rebuilding its industrial economy. Investments in infrastructure, improved regulatory coherence, and strengthened digital and logistical frameworks have connected producers to markets more effectively. However, Bery pointed out that manufacturing growth has not met expectations, describing it as "one cylinder that isn’t firing" as policymakers would desire.
Speaking at the Institute for Studies in Industrial Development (ISID) Conference on India’s Industrial Transformation, Bery mentioned that the cabinet paper for the NMM is under preparation. He emphasized that creating competitive industrial ecosystems at state and regional levels is crucial for India's industrial success. The plan is to develop strategies that are tailored to the unique strengths of each state.
Bery also noted that, similar to the US, clusters of industries should not be confined to state boundaries. India needs to explore mechanisms to connect these clusters across states. He suggested that innovative governance initiatives, such as the State Industrial Development Reviews and the National Manufacturing Mission, could help identify each state's comparative advantages.
Furthermore, Bery stressed that India cannot rely indefinitely on imported technologies and fragmented production systems. Deepening domestic value chains is essential. The National Manufacturing Mission is designed to build on the existing 'Make in India' initiative by promoting greater integration across various sectors.
Looking ahead, Bery identified industries such as green hydrogen, electric mobility, semiconductors, and advanced materials as vital for the next industrial revolution. He stated that India's challenge is to take the lead in these sectors rather than following others.
Earlier this year, Finance Minister Nirmala Sitharaman announced plans for the NMM in her Budget speech, targeting small, medium, and large industries with a focus on clean technology manufacturing. The mission will concentrate on five key areas: improving the ease and cost of doing business, enhancing skills for in-demand jobs, supporting MSMEs, ensuring technology availability, and producing quality products.
The announcement of the NMM aligns with the government's goal to increase the share of manufacturing in India's GDP from the current 17% to 25%. The Economic Survey 2024-25 indicated that while manufacturing growth is recovering steadily, it still lags behind pre-pandemic levels.
