India Aims to Double Share of Manufacturing in GDP to 23% by 2047

29-04-2025

In April 2025, FM Sitharaman announced that India wants to increase the contribution of the manufacturing sector in its economy (GDP) from 12% now to 23% by the year 2047.
Why 2047?
1. Because it marks 100 years of independence, and India wants to become a developed country (Viksit Bharat) by then.

Why Is This Important?

India's economy today is mostly based on services (like IT, finance, tourism) — they make up about 64% of the GDP, but these do not create enough jobs, especially for low- and semi-skilled workers.
Problems with current structure:
1. Not enough jobs for India's large youth population (demographic dividend)
2. Too much import of important goods like electronics and energy equipment
3. Low participation in global manufacturing supply chains (like China or Vietnam)

Services Sector	Manufacturing Sector
64% of GDP	~12% of GDP
High-skill & urban jobs	Labour-intensive, rural jobs
Rapid growth	Needed for job creation & exports

Despite booming services (esp. IT, gig economy), manufacturing is essential for inclusive, sustainable, job-rich growth.

The government wants to:

Create more jobs through manufacturing
Reduce imports by producing more locally
Export more and become part of global supply chains
Focus on 14 high-potential sectors like electronics, pharma, semiconductors, EV batteries, etc.

Sector	Key Details/Impact
1. Electronics (LSEM)	Mobile production ↑ 5.8 cr → 33 cr (2014–24), FDI ↑ 254%, exports ↑
2. Pharmaceuticals	3rd largest by volume, 50% production exported
3. Medical Devices	Domestic CT/MRI production through tech transfer
4. Automobiles	₹25,938 cr outlay; EV focus; ₹67,690 cr expected investment
5. Auto Components	Linked to auto scheme; encourages advanced tech adoption
6. Solar PV Modules	₹24,000 cr outlay (Phases 1+2), target: 65 GW, import ↓, jobs ↑
7. Telecom & Networking	60% import substitution, 5G/4G exports ↑
8. Drones & Components	Turnover ↑ 7x; MSMEs/startups driving growth
9. Food Processing	Enhances exports, domestic value addition
10. Textiles	Focus on MMF & technical textiles; labour-intensive
11. IT Hardware	Local laptops, tablets, servers manufacturing encouraged
12. White Goods (ACs, LEDs)	Promotes energy efficiency; component ecosystem
13. Specialty Steel	Reduces import dependency, high-grade production
14. Advanced Chemistry Cells (ACC)	EV battery & grid storage boost

Parameter	Details
Launched	2020
Purpose	Boost domestic manufacturing & exports
Budget Outlay	₹1.97 lakh crore (~US$24 billion)
Investments (Till Aug 2024)	₹1.46 lakh crore
Production & Sales	₹12.5 lakh crore
Exports	₹4 lakh crore
Jobs Created	~9.5 lakh (direct + indirect)

India is shifting from traditional manufacturing to smart, tech-driven manufacturing.
Features:
1. Automation & Robotics
2. Artificial Intelligence (AI)
3. Internet of Things (IoT)
4. Big Data & Analytics

Term	Explanation
GDP (Gross Domestic Product)	The total value of all goods and services produced in a country within a specific time period. Measures the size and health of an economy.
Sunrise Sectors	New and emerging industries with high growth potential, like semiconductors, renewable energy, and battery technology.
Industry 4.0	The 4th industrial revolution focused on smart manufacturing using technologies like automation, AI, IoT, and data analytics.
Labour-Intensive Sectors	Industries that require a large workforce to operate, such as textiles, garments, and leather. Crucial for job creation.
Gig Economy	A labor market based on short-term contracts or freelance work rather than permanent jobs (e.g., food delivery, ride-sharing).
Import Dependency	Reliance on foreign countries for essential goods or raw materials. High import dependency can make a country vulnerable to global disruptions.
Global Supply Chains	International networks through which goods and services pass from suppliers to customers. Efficiency here boosts trade and competitiveness.