Context
The manufacturing strategy of India in 2026 has changed to a value-oriented model rather than a basic assembly one with emphasis on high technology segments and global value chain (GVC) integration. Economic Survey 2025-26 revealed that today in India 46.3 % of the total manufacturing value added is through medium and high-technology activity.
The Strategic Shift in Indian Manufacturing
The ongoing industrial period is focused on high-value addition segments capable of enhancing national security, energy requirement and technological self-sufficiency.
- National Manufacturing Mission (NMM): This mission was introduced in the 2025-26 Union Budget; the small, medium, and large industries are being targeted to create a strong high-tech ecosystem.
- Global Value Chain (GVC) Integration: India is no longer solely consuming locally, but is evolving to be a so-called China+1 option, i.e. in sectors that promise a rich export market such as electronics.
Pillar I: High-Technology Sectors
- Semiconductors: One of the central areas of the digital sovereignty in India is the India Semiconductor Mission (ISM) which has already given the go-ahead to investments worth more than 1.6 lakh crore. Commercial production of “Made-in-India” chips is slated to begin by late 2025/early 2026 through facilities like Tata-Powerchip and Micron.
- Electronics Ecosystem: Mobile phone manufacturing has seen a 30-fold increase in production value over the last decade. This is to achieve 300 billion production and domestic value addition that will increase to more than 70% by 2026.
- High-tech Engineering and Robotics: Industry 4.0 (AI, Digital Twins, and IoT) adoption is projected to contribute to the manufacturing GDP to the tune of $270 billion by 2035.
Pillar II: Strategic and Sustainable Energy
- Clean Tech Manufacturing: The NMM is interested in native production of EV batteries, solar PV cells, and green hydrogen electrolysers.
- Defense Indigenisation: Making priority on advanced materials and aerospace components to lower levels of importation, based on the SRIJAN portal and defense industrial corridors.
Key Enablers for the Next Leap
- Production-Linked Incentives (PLI): An incentive spanning 14 industries, so far the PLI has already garnered almost ₹2 lakh crore investments, which is propelling the growth of pharmaceuticals and white goods.
- Logistics and Infrastructure: PM Gati Shakti National Master Plan incorporates multi-modal connectivity to minimize the logistics cost, and Industrial Corridors offer the infrastructure that is ready to move in.
- Future-Ready Workforce: To close the estimated semiconductor skills short of 300,000 by 2027, the government is redesigning vocational training through Skill India Digital.
- Ease in Regulations: With four Labor Codes in place towards the end of 2025, compliance has been simplified with the outdated laws giving way to the new regime.
Challenges to Overcome
- Poor R&D Investment: India invests 0.65% currently on R&D, which is very low compared to such global leaders as South Korea (4.8%).
- Infrastructure Gaps: Unstable power supply and high energy prices to industries are still a challenge to high-tech manufacturing which is energy intensive.
- Global Competition: It takes long term fiscal aid and technological innovations to compete with massively subsidised ecosystems in Taiwan and China.
Conclusion
India’s next manufacturing leap is not simply about producing more, but about making things smarter and cleaner. The key to success lies in the successful implementation of the National Manufacturing Mission, even further integration of DeepTech, and transition to Green Manufacturing so that the country could become the world leader in the fourth industrial revolution.
Source: The Indian Express
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