This research paper delves into the historical evolution 
of India's trade and manufacturing, from the Indus Valley 
Civilization to the present, highlighting its significant 
contributions to the global GDP. The paper traces India's 
economic decline during British colonial rule, emphasizing the 
intentional destruction of indigenous industries. Post
independence, a shift towards service-centric policies led to a 
gradual decrease in India's global GDP share. However, recent 
initiatives like "Make in India" have demonstrated positive impacts, with India's GDP share growing to 
7.51% in 2023. 
The paper scrutinizes the current landscape, recognizing the success of attracting global 
manufacturing giants but underscoring the need to transform Indian MSMEs into globally recognized 
entities. It identifies challenges faced by these MSMEs, such as limited exposure to global markets, 
bureaucratic hurdles, and infrastructure deficiencies. The critical analysis emphasizes the importance of a 
comprehensive approach encompassing policies, production, positioning, and promotion to revive India's 
manufacturing sector. 
A key proposal put forth is the transition from 'Make in India' to 'Made by Indians,' focusing on 
empowering Indian MSMEs to become integral components of the global supply chain. The paper explores 
the potential benefits of this shift, citing success stories in the Indian automobile sector. Additionally, it 
addresses the demographic dividend and the imperative to enhance the skills of India's workforce. 
The research concludes with a gap analysis, outlining the challenges hindering India's 
manufacturing sector growth. It proposes solutions, including boosting investments, policy support, and a 
focus on tech-intensive and skill-intensive sectors. The paper underscores the importance of stabilizing the 
disrupted global supply chain, strengthening operational efficiency, and addressing challenges faced by 
MSMEs. 
The study's objective is to provide a comprehensive understanding of the current state of Indian 
manufacturing, identifying opportunities and risks. By emphasizing collaboration between the government 
and the private sector, the research envisions a revitalized Indian manufacturing sector that plays a 
pivotal role in the nation's economic development and global supply chain dynamics. 
KEY WORDS: Make in India, Make by Indians.  
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Objective of the Study  
The industrial economic strength of any country is predominantly contingent on the 
performance of its manufacturing sector, which serves as the backbone of the economy. This sector 
plays a pivotal role by not only bolstering agriculture and services but also by developing products that 
enhance efficiency and productivity in these domains. 
While the current government of India has initiated measures, including the "Make in India" 
campaign, to invigorate the manufacturing sector, there remains a pressing need for innovative ideas 
and comprehensive improvements.The government's objective of increasing the manufacturing sector's 
share in the GDP necessitates a more targeted and result-oriented approach, with a particular emphasis 
on promoting domestic manufacturing. 
The challenges faced by the manufacturing sector in India, particularly Micro, Small, and 
Medium Enterprises (MSMEs), underscore the urgency for strategic interventions. Issues such as 
inadequate infrastructure, a dearth of skilled labor, technological upgrades, limited access to global 
markets, and complexities in securing affordable credit are hindering the growth of this crucial sector. 
Moreover, heightened competition from low-cost production countries compounds these challenges. 
This study endeavours to identify opportunities, assess risks, and propose measures to mitigate 
these challenges. Exploring avenues from local to global perspectives, the study aims to guide the Indian 
manufacturing industry, particularly MSMEs, towards a more productive, efficient, and influential 
position. Despite formidable challenges, collaborative efforts between the government and the private 
sector, coupled with a profound commitment to growth, have the potential to drive sustainable reforms. 
The Indian manufacturing sector is poised to assume a pivotal role in both the nation's economic 
development and the global supply chain, provided concerted efforts are directed towards its 
advancement. 
Introduction: India – From 0000 to 2023 
The historical trajectory of India's trade and business dates back to the illustrious Indus Valley 
Civilization (2500 BCE to 1500 BCE). During this era, Indian business houses engaged in trade with 
some of the world's earliest urban civilizations, including Mesopotamia and Egypt. Trade items 
encompassed Pottery, Textiles, Metals, and Agricultural products, all crafted by Indian artisans. This 
flourishing trade continued through the Mauryan and Gupta Empires (4th century BCE to 6th century 
CE), where Indian economy prospered with the exchange of Textiles, Spices, Gems, and Iron. 
For almost 1900 years, India's trade items were not only "Made in India" but also "Made by 
Indians." However, the dynamics shifted during the early 20th century with the onset of the Industrial 
Revolution in Europe and British colonization in India, intentionally disrupting Indian artisans and 
manufacturers. 
This business and trading model positioned India as a significant contributor to the World GDP, 
accounting for 32% in the Classical era and remaining around 25% until the Late Medieval era. The 
decline began with invasions from Western Asia, and despite this, India's share in the World GDP was 
over 12% until the last 40 years of British rule, marked by intentional economic plundering. 
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Post-independence in 1947 until the mid-1990s, the focus on the service sector rather than 
manufacturing led to a decline in India's contribution to the World GDP, dropping from 5.9% in 1940 to 
4.05% in 1990¹. However, a pivotal change occurred in 2014 with the introduction of the "Make in 
India" program by the current government. This initiative aimed to promote investment in 
manufacturing, transforming India into the preferred destination for global manufacturing houses. 
The results have been promising, with a surge in Foreign Direct Investment (FDI) inflow worth 
USD 358.30 billion in the last six financial years (2014-20), representing 53% of the FDI reported in the 
previous two decades (USD 681.87 billion). This shift has not only boosted India's percentage 
contribution to the World GDP to 6.82% in 2020 but also witnessed further growth to 7.51% in 2023¹. 
The "Make in India" initiative has played a pivotal role in revitalizing India's manufacturing sector and 
reclaiming its historical standing in the global economic landscape. 
Move Forward to the Past 
The "Make in India" initiative, led by the Government of India, has significantly shaped the 
nation's business environment and economic trajectory. Currently, India stands as the world's most 
attractive investment destination, holding the title of the fastest-growing economy globally. The country 
has achieved notable recognition across various indices, including the Growth, Innovation, and 
Leadership Index among the top 100 nations. Furthermore, it occupies the 7th position among 110 
global investment destinations, solidifying its appeal for international investors. India's national brand 
has garnered esteem as the 7th most valued globally, contributing to its positive image on the 
international stage. The initiative has led to commendable advancements, reflected in the World Bank's 
Ease of Doing Business list, where India ascended 12 positions, and the Global Competitiveness Index, 
witnessing a jump of 16 places³. 
On a sectoral level, the "Make in India" initiative has yielded transformative outcomes. India has 
emerged as the second-largest manufacturer of mobile phones and the third largest in automobiles, 
establishing its prowess in the technology and automotive sectors. The country's pharmaceutical 
industry has earned the title of the "Pharmacy of the World," underscoring its significant role in global 
healthcare. In the realm of space exploration, India's historic achievement of landing on the moon's 
south pole and the Mangalayan mission's reliance on components from Small and Medium-sized 
Enterprises (SMEs) exemplify the initiative's diverse successes. These accomplishments not only 
enhance India's global standing but also showcase the effectiveness of the "Make in India" initiative 
across technology, healthcare, and space exploration. 
A closer examination of the current landscape reveals an overwhelming interest from global 
manufacturing giants in establishing their manufacturing foothold in India. Prominent examples include 
the automotive powerhouse Fiat Chrysler Automobiles, which is set to invest approximately $230-380 
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million in the establishment of an export-oriented manufacturing unit. In the aviation sector, Airbus 
Group is actively working towards increasing its aerospace parts sourcing from Indian companies to a 
substantial $2 billion. The spectrum of industries involved in this shift is broad, encompassing giants 
like Hitachi, Google for its Android One project, Apple, Foxconn, Harbin Electric, and several Swedish 
companies such as Tetrapak, Scania, Ericsson, and Volvo. These companies are strategically opting to 
shift their manufacturing bases to India, contributing to the diversification of their global supply chain 
in a more distributed and resilient fashion⁴. The emerging scenario underscores India's growing 
significance as a preferred destination for global manufacturing operations. 
A critical examination beyond the successes and achievements reveals that while India has 
successfully attracted global manufacturing conglomerates to establish facilities, there is a considerable 
distance to cover in creating globally acclaimed multinational manufacturing brands from the Indian 
Micro, Small, and Medium Enterprises (MSME) sector, which forms the backbone of the Indian 
manufacturing landscape. Delving into the data, it becomes apparent that out of the 37.59% 
contribution of MSMEs to the Indian GDP, only 7.09% comes from the manufacturing sector, with the 
remaining 30.50% attributed to the service sector. The Ministry of MSMEs reports a staggering 63.4 
million MSMEs in India, employing approximately 120 million people, ranking second only to the 
agriculture sector in employment generation. Despite these figures, the manufacturing sector's 
contribution from MSMEs stood at 35.98% of India's total manufacturing output in 2020-21, 
experiencing a continuous decline for the past four consecutive years. This analysis underscores the 
need for focused efforts to bolster the manufacturing capabilities of Indian MSMEs and foster the 
emergence of globally recognized manufacturing brands originating from within the country. 
To re-establish India as the largest contributor to the world GDP, a comprehensive 360° 
approach is imperative for the manufacturing sector, with a concentrated focus on Micro, Small, and 
Medium Enterprises (MSMEs) engaged in manufacturing cutting-edge technology products. This 
approach necessitates addressing challenges faced by MSMEs and requires government intervention 
across policies, production processes, positioning, and promotion. Identifying the challenges faced by 
MSMEs is the initial step: 
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 Financial Challenges: MSMEs grapple with expensive credit, complex collateral requirements, and 
protracted documentation processes from financing institutions, leading to unwarranted delays in 
fund disbursement. 
 Limited Global Exposure: A lack of exposure to global market intelligence results in a knowledge 
gap concerning high-demand products and marketing linkages globally. 
 Overseas Market Understanding: Challenges arise from a lack of understanding of overseas 
markets, hindering the establishment of export distribution channels and connections with 
international counterparts. 
 Bureaucratic Hurdles: A bureaucratic attitude in government institutions and among officials 
involved in promoting awareness on export assistance programs creates obstacles for MSMEs. 
 Regulatory Complexities: Cumbersome regulatory frameworks, Intellectual Property Rights 
issues, and navigating numerous International Trade Agreements present obstacles for MSMEs. 
 Technology Accessibility: Limited access to easily accessible, low-cost cutting-edge technologies 
hampers high-value addition and packaging that meets global quality standards. 
 Cost and Supply Chain Challenges: Competitive costs, robust supply chains, and affordable 
logistics for raw material procurement pose challenges for smaller-scale MSMEs due to territorial 
complexities and financial limitations. 
 Infrastructure Weakness: Basic infrastructure support, including uninterrupted power, water, 
and transportation, is lacking for non-cluster-based MSMEs. 
Identification of challenges is the crucial first step before devising effective countermeasures, 
allowing us to progress towards the economic prominence we once enjoyed. 
While acknowledging the positive impact of the government's "Make in India" initiative in 
highlighting the significance of the manufacturing sector, it is evident that we must now transition to 
the next phase—a more advanced version that resonates with the ethos of "Made by Indians." 
This evolved initiative should not only address challenges but also foster a comprehensive ecosystem 
that empowers Indian entrepreneurs and innovators to contribute to the entire value chain, 
emphasizing research, development, and innovation. 
By propelling the narrative from "Make in India" to "Made by Indians," we can envisage a 
transformative trajectory where homegrown products and industries not only meet global standards 
but also stand out for their quality, innovation, and excellence on the global stage. 
Made by Indians 
Let's begin by elucidating the concept of "Made by Indians" and its potential to catalyze growth 
in the Indian manufacturing sector and the broader economy. 
In the contemporary landscape of economic development and a globalized business ecosystem, 
for India to ascend as a global manufacturing hub, it must not only attract multinational foreign 
manufacturing giants to establish production lines but also elevate Indian Micro, Small, and Medium 
Enterprises (MSMEs) into global manufacturing powerhouses. These entities should evolve into trusted 
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partners, recognized brands, and integral components of the global supply chain and product 
development ecosystem. 
To grasp the affirmative impact of this approach, consider the Indian automobile sector as a 
compelling example, underscoring the necessity to shift focus from the "Make in India" initiative to the 
"Made by Indians" policy. 
As of 2017–2018, India ranked as the sixth-largest global automobile producer, manufacturing 
approximately 29 million vehicles annually, with around 4 million being exported5. The automotive 
sector's contribution to the national GDP has surged from 2.77% in 1992–1993 to approximately 7.1% 
today. This sector represents nearly 49% of the manufacturing GDP (2015–2016)6 and employs over 29 
million people, encompassing both direct and indirect modes of employment. With a turnover of around 
US$ 67 billion (2016–2017)7 for the automobile sector and US$ 43.5 billion (2015–2016)8 for the 
component industry, the Indian automobile industry contributed 4.92% to global vehicle production in 
20179. 
Key advantages that make India an attractive investment destination include: 
 Diversification post-Covid-19: The pandemic revealed the risks associated with over-reliance on a 
single manufacturing base within the global supply chain. 
 Strategic location: India's strategic positioning on the world map facilitates business expansion in 
Asia and Africa. 
 Large domestic market: India boasts a substantial domestic market. 
 Skilled and cost-effective workforce: The availability of a skilled and relatively economical 
workforce maintaining high-quality standards. 
 Cost-effective operations: India offers a conducive environment for cost-effective operations. 
Despite these positive aspects, recent instances, such as the departure of global automobile 
giants like Harley Davidson, General Motors, and more recently, Ford, from India have raised concerns. 
While these exits resulted in job losses for skilled and semi-skilled workers, they did not diminish 
India's standing as a manufacturing hub. The resilience of the Indian automobile sector is evidenced by 
the global prominence achieved by homegrown brands like Tata Motors, M&M Limited, TVS Motor 
Company Limited, Maruti Suzuki Limited, Bajaj Auto Limited, Ashok Leyland, and Sona Koyo Steering 
Systems Limited. 
Data indicates that the number of patents granted to leading Indian manufacturers from 2011
2018 has exceeded those granted from 2001-2010, illustrating the impact of investments in policies, 
technology, innovation, product positioning, and global promotion. 
Opportune Areas 
Telecommunications 
This sector stands as one of the pivotal contributors to the Indian economy, accounting for 6.5% 
of India's GDP. In the final quarter of the fiscal year 2022-2023, the industry demonstrated robust 
performance, generating a substantial gross revenue of US$11.38 Billion. Encompassing Infrastructure, 
Equipment, Mobile Network Virtual Operators (MNVOs), White Space Spectrum, 5G, Telephone service 
providers, and Broadband, it holds the esteemed position of being the second largest globally. 
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As of September 2023, the sector boasts a formidable subscriber base of 1.181 billion, making it 
the second-largest telecommunications market in the world. The overall tele-density stands at an 
impressive 84.76%, with the predominantly untapped rural market accounting for 58.05%, and the 
urban segment reaching 133.54%. 
India's telecommunications industry, marked by a growth rate of 10% in Micro, Small, and 
Medium Enterprises (MSME) sectors until 2020, positions the country as a significant player in this 
global landscape. Within this dynamic sector, Indian MSMEs are presented with diverse growth 
opportunities, including: 
 Local Manufacturing: Venturing into the production of low-cost mobile phones and auxiliary 
devices. 
 Telecom Equipment Manufacturing: Engaging in the production of telecom equipment, including 
routers and switches. 
 Base Station Equipment Production: Contributing to the manufacturing of crucial base station 
equipment such as transceivers. 
 Value-Added Services Development: Exploring and contributing to the development of value
added services in the telecommunications domain. 
These growth avenues underscore the potential for Indian MSMEs to play a pivotal role in 
shaping and advancing the telecommunications sector. 
Healthcare & Pharmaceutical 
According to the NITI Ayog report, the healthcare industry in India has demonstrated 
substantial growth, registering a Compound Annual Growth Rate (CAGR) of approximately 22% since 
2016. In 2015, this sector ascended to become the 5th largest employer, directly engaging 4.7 million 
individuals. Despite commendable progress, India maintains a position as a net importer in the medical 
device domain. Presently, the country stands as the 4thlargest medical devices market in Asia, yet it 
relies heavily on imports, accounting for about 86% of its medical devices, particularly for critical and 
advanced medical commodities. The medical devices sector has sustained a steady growth trajectory, 
with a CAGR of 15% over the last three years. 
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In the evolving landscape of health technology, marked by advancements such as Artificial 
Intelligence (AI), wearables, mobile technologies, and the Internet of Things (IoT), myriad opportunities 
await Micro, Small, and Medium Enterprises (MSMEs). Key segments where new prospects are likely to 
unfold for health technology players, particularly MSMEs, include: 
 Manufacturing of Personal Protective Equipment (PPE): There is a burgeoning demand for the 
production of PPE, presenting a significant avenue for MSMEs to contribute to healthcare 
infrastructure. 
 Manufacturing of Low-Cost Medical Essentials and Accessories: Opportunities abound for 
MSMEs in the manufacturing of affordable medical essentials, including surgical gloves, scrubs, and 
syringes, addressing the need for cost-effective healthcare solutions. 
 Telemedicine: With the increasing acceptance and integration of telehealth services, MSMEs can 
explore innovative solutions and technologies to enhance the telemedicine landscape. 
 Diagnostic Labs: The expanding diagnostic sector offers MSMEs the chance to contribute to the 
development of diagnostic labs, leveraging technology to improve healthcare diagnostics. 
These identified areas underscore the potential for MSMEs to play a pivotal role in shaping the 
future of healthcare technology in India. 
Electronics 
The global electronics industry, valued at US$ 2.9 trillion in 2020, witnesses a substantial 
demand for electronic components in India, primarily fueled by consumer electronics, mobile phones, 
and industrial electronics, which collectively account for 82% of the demand. According to a report by 
the Ministry of Electronics and Information Technology (MeitY), India aspires to achieve electronics 
manufacturing worth US$ 300 billion by 2026, aiming to strengthen its position in the global electronic 
value chain. 
India's market share in the global electronics manufacturing industry experienced significant 
growth, reaching 3.6% in 2020 from 1.3% in 2012. The country has solidified its standing as the 
second-largest mobile handset manufacturing country globally and concurrently holds the position of 
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the second-largest smartphone market worldwide. In 2022, India produced mobile phones worth 
around Rs 3.5 lakh crore, with projections estimating production to reach Rs 4-4.25 lakh crore in 2023. 
According to the Federation of Indian Chambers of Commerce and Industry (FICCI), the 
television production sector in India recorded US$ 4.24 billion in 2020-21, poised to grow to US$ 10.22 
billion by 2025-26, with a Compound Annual Growth Rate (CAGR) of 20%12. In the realm of electronics 
component manufacturing, India boasts a valuation exceeding US$ 11 billion, although the demand 
surpasses US$ 40 billion13, emphasizing potential growth areas. 
The Printed Circuit Board Assembly (PCBA) market in India is a promising sector, exhibiting a 
notable Compound Annual Growth Rate (CAGR) of 30%. It is anticipated that over the next five years, 
this market will present substantial opportunities, driven by increased outsourcing to Electronics 
Manufacturing Service (EMS) players, the "China+1" strategy, and the development of the domestic 
electronics ecosystem. 
The Electronic Manufacturing Services (EMS) market in India is projected to reach US$ 80 
billion14 in the next five years, offering extensive growth opportunities for Indian conglomerates and 
Micro, Small, and Medium Enterprises (MSMEs). Key segments poised for emergence in the electronic 
manufacturing landscape include: 
 Smartphone Manufacturing 
 Information and Communication Technology (ICT) Hardware 
 Consumer Electronics and Consumer Durables 
 Electronic Components 
 AC and LED Manufacturing 
 Nano-electronics and Microelectronics 
 Semiconductor Design 
 Manufacturing of Products for Defence and Security Forces 
These identified segments highlight the expansive potential for growth and innovation within 
India's electronic manufacturing sector. 
Food and Agriculture 
India plays a pivotal role in the global agriculture sector, holding the title of the highest 
producer of milk, pulses, and spices. Additionally, it claims the position of the second-largest producer 
of various commodities, including fruits, vegetables, tea, farmed fish, cotton, sugarcane, wheat, rice, and 
sugar. The Indian food processing industry, contributing to 32% of the country's total food market, 
stands as one of the largest and ranks 5thin terms of production, consumption, export, and anticipated 
growth. 
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The evolving lifestyle and a growing demand for processed and ready-to-eat foods are 
reshaping the landscape of the food industry. Despite the preference for convenience, contemporary 
consumers seek healthier, hygienic, and standardized products. This consumer preference opens 
substantial growth avenues for Indian Micro, Small, and Medium Enterprises (MSMEs) in the 
production of nutritious and wholesome foods and beverages. 
The agricultural sector in India is undergoing a transformative phase, presenting opportunities 
for innovation. The incorporation of Artificial Intelligence (AI)-driven machinery and real-time Data 
and Machine Learning (ML) analytics could revolutionize agricultural processes, accelerating tasks such 
as harvesting, crop monitoring, and collection. This technological integration not only enhances 
productivity and crop quality but also proves beneficial by reducing manual labor and operational 
costs. 
Diverse growth opportunities emerge for Indian MSMEs in the agricultural sector, including: 
 Food Products: The production of ready-to-cook and ready-to-eat items, premixes, milk and dairy 
products, bakery items, processed meat, processed fruits and vegetables, marine products, and 
Mozzarella cheese. 
 Infrastructure Development: Establishing backend infrastructure such as cold chain storage 
facilities, farm collection centers, and other logistical support. 
 Packaging Innovation: Exploring innovative packaging solutions for processed food to meet 
evolving consumer preferences. 
 Contract Manufacturing: Engaging in contract manufacturing for crop protection chemicals and 
crop nutrients. 
 Technological Advancements: Developing AI and ML-driven tools and machinery to enhance 
efficiency and precision in agriculture. 
These identified areas underscore the vast potential for Indian MSMEs to contribute 
significantly to the agriculture and food processing industry, aligning with the evolving needs and 
preferences of consumers. 
Demographic Dividend 
As per the UNFPA, the 'Demographic Dividend' refers to the growth potential derived from 
shifts in a country's age distribution, particularly when the working-age population (15 to 64 years) 
surpasses the non-working population. India stands out as one of the few countries with a median age 
of 28.4 years, contrasting with 48.4 in Japan and 38 in China as of 2020. A World Bank study (2005:10) 
recognizes India for its substantial skilled, English-speaking workforce, particularly in the sciences. 
With a robust democracy, coupled with key attributes such as macroeconomic stability, a vibrant 
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private sector, a free-market economy, a well-established financial sector, and a diversified science and 
technology infrastructure, India boasts one of the world's largest domestic markets19. 
The potential of this Demographic Dividend can catalyze improved economic growth in India. It 
contributes to an expanded workforce, enhancing overall productivity and creating greater financial 
flexibility for investments in human and physical infrastructure. Furthermore, it promotes increased 
participation of women in the workforce, thus generating new sources of economic growth. The 
Demographic Dividend also propels urbanization and industrial development, as a substantial number 
of individuals seek employment, driving economic activities. With a working-age population 
constituting approximately 68% of the total, India has the potential to emerge as a significant influencer 
in the global economy, contributing to more than half of Asia's workforce in the coming decades. 
However, alongside these promising aspects, there are pressing concerns. India needs to foster 
increased participation of women in economic activities. As of 2019, only 20.3% of women were either 
working or actively seeking employment, a decline from 34.1% in 2003-04. Equipping the youth with 
critical skills is imperative, as future jobs will demand specialized expertise. India must enhance 
education and health parameters significantly to ensure a skilled and competent workforce capable of 
capitalizing on emerging opportunities. 
Communities  
Since the Vedic age, India has stood out as a civilization where businessmen, termed as 
"Vaishyas," were distinctly acknowledged and granted a special status, playing a crucial role in the 
socio-economic fabric. Blessed with a vast landmass and an extensive coastline of over 8000 KM 
(undivided India), the country's numerous coastal cities, strategically positioned as business centers, 
served as pivotal merging points for diverse trade routes, including the Silk route. Unlike a plethora of 
languages, India's regions were characterized by unique business communities such as the Banias and 
Kharis in the north, the Marwaris and Sindhis in the west, the Chettiars and Komatis in the south, and 
the Bengalis and Odias in the east. 
Up until the onset of British colonialism in the 1850s, Indian business followed a distinctive 
model known as "Local supply-chain with Global markets." Each region boasted exclusive products 
crafted by local artisans with region-specific raw materials. However, the finished goods were traded to 
merchants from other regions and even foreign lands. Examples like the "Maslin" from the East, 
"Spices" from the South, and "Gems" from the West exemplify this rich tradition. 
Post-independence from British colonialism, Indian entrepreneurship, innovation, and business 
dynamics underwent significant transformations. A notable shift occurred in the re-evaluation and 
restructuring of national policies, moving away from postcolonial Nehruvian socialism to fostering an 
environment that prioritizes innovation, economic freedom, and a culture of entrepreneurship for both 
the youth and established businesses. This strategic shift is reflected in the World Bank's "The Ease of 
Doing Business" report for 2019, where India jumped an impressive 79 places to secure the 63rd overall 
position, compared to its 142nd place in 2014. 
The startup ecosystem in India has been invigorated by recent government initiatives, notably 
championed by Hon’ble Prime Minister Shri Narendra Modi. However, there remains considerable work 
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to be done. India needs to overhaul its educational curriculum for young children, steering it towards 
fostering an entrepreneurial mindset, instilling innovative ideas, and cultivating a tech-oriented 
orientation. 
Challenges 
The Make in India movement stands as a pivotal initiative with profound implications for India's 
economic development. By enticing Foreign Direct Investment (FDI) and encouraging global 
organizations to establish manufacturing units within the country, the program has undeniably fueled 
industrial growth, generated job opportunities, and reduced dependency on imports. However, its 
impact on elevating Indian manufacturers, particularly in the Micro, Small, and Medium Enterprises 
(MSME) sectors to attain global recognition or cultivate a robust contract manufacturing space, has 
been somewhat limited. 
If embraced by the Government of India, this concept and initiative present a significant 
opportunity for Indian MSMEs in the manufacturing sector. It aligns with the Government's objective of 
fostering sustainable economic development that integrates all segments of society, simultaneously 
enhancing the standard of living for its citizens. Nevertheless, this endeavor comes with formidable 
challenges, including: 
 Bureaucratic and Regulatory Support: The success of such an initiative hinge on the imperative 
need for robust bureaucratic and regulatory support, coupled with heightened transparency at 
every level. 
 Infrastructure Development: The rapid growth necessitates swift development in physical 
infrastructure such as railways, roadways, power, and airports. 
 Agricultural Implications: Given that about 60% of India's landmass is cultivable, a strong push 
towards manufacturing may potentially adversely affect the agriculture sector. 
 Environmental Concerns: Speedy industrialization poses risks to the natural resources of the 
country, potentially leading to pollution and environmental side effects. 
 Skill Development: Building capacity for the necessary skill sets among the urban poor and rural 
migrants is crucial for fostering inclusive growth. 
 Domestic Value Addition: Enhancing domestic value addition and technological depth in the 
manufacturing sector is imperative to boost the global competitiveness of Indian manufacturing. 
In navigating these challenges, a holistic and collaborative approach is essential to ensure that 
the Make in India movement not only propels economic growth but also upholds environmental 
sustainability and inclusivity. 
Burden of hopes 
The International Monetary Fund (IMF) has placed India as the "bright spot" in the world 
economy, foreseeing it as a key player in the global economic revival. The IMF anticipates that India will 
singularly contribute 15% to the global growth in 2023. In the first two quarters of 2023-24, India 
demonstrated robust growth, recording 7.8% in the first quarter and 7.6% in the second quarter, 
culminating in an impressive growth rate of 7.7%20 for the initial six months. 
The period spanning from 2014 to 2022 marked a significant phase in the Indian economy. The 
country underwent a series of fundamental and governance reforms that substantially enhanced overall 
efficiency. A key focus was on improving the ease of living and doing business. Reforms aimed at 
creating public goods, instituting trust-based governance, collaborating with the private sector for 
growth, and boosting agricultural productivity were pivotal. Dedicated infrastructural development 
initiatives such as Bharatmala, Sagarmala, electrification, railway upgrades including Vande Bharat and 
fast trains, and UDAN have significantly bolstered physical infrastructure. Additionally, the 
government's emphasis on digital infrastructure has been a transformative force, with India's core 
digital economy expanding at 2.4 times the overall economic growth between 2014 and 201921, as per 
the RBI’s Monthly Bulletin. 
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India's performance amidst global challenges, including the pandemic and geopolitical events 
like the Russia-Ukraine and Israel-Palestine conflicts, has instilled hope in both developing and 
developed economies. The global economic community now looks to India to maintain and accelerate 
this momentum. However, to sustain its global standing, India needs to address critical aspects such as: 
 Monitoring External Factors: Vigilance on issues like oil prices, external demand, and political 
developments for potential impacts on India’s economic trajectory. 
 Adapting to Global Trade Trends: Navigating the declining global trade environment, marked by a 
reduction in world trade growth. 
 Policy Coordination: Ensuring consistent budgetary and economic policy coordination, 
considering macro risks and addressing inflation warnings. 
 Macroeconomic Fundamentals: Placing increased focus on macroeconomic fundamentals and 
closely monitoring economic indicators. 
 Safeguarding Resilience: Persistent emphasis on preserving economic resilience and stability for 
the lower and middle-income population. 
 Responsive Measures: Vigilant observation and timely responsive measures for both global and 
domestic economic challenges. 
Gap Analysis 
The manufacturing sector demands a comprehensive examination from the government, 
academia, and researchers. Despite concerted efforts to augment its share in the GDP, the sector's 
contribution has not exhibited remarkable development. In a nation with 1.4 billion mouths to feed, 
India's overall economic growth and global market appeal could be severely impacted if the 
manufacturing sector does not undergo significant improvements. Reduced productivity may negatively 
affect job opportunities within the manufacturing sector, leading to reluctance from firms to invest in 
new technologies, research & development, and the creation of enhanced products to remain 
competitive. Ultimately, a less viable manufacturing sector could prompt business houses, including 
Micro, Small, and Medium Enterprises (MSMEs), to redirect both financial and human resources to 
other sectors. 
Addressing these gaps requires immediate attention and swift action. To bridge these divides, India 
must: 
 Boost Investments: Increase investments in domestic manufacturing units, especially MSMEs, 
supporting infrastructure upgrades, product innovation, adoption of cutting-edge technologies at 
affordable costs, and skill development for human resources. 
 Strategic Investment Policies: Create focused investment policies for the manufacturing sector, 
providing both financial and non-financial incentives, promoting industrial and investment 
activities, and streamlining regulatory procedures. 
 Infrastructure Development: Focus on developing essential infrastructure, including robust 
logistic networks, uninterrupted power supply, and seamless data connectivity. 
 Regulatory Process Re-engineering: Restructure existing regulatory processes to mitigate 
complexities related to bureaucratic involvement, labor laws, and payment disbursement. 
 Entrepreneurship Encouragement: Encourage entrepreneurship in the manufacturing of modern 
and technologically superior products. Provide support for innovative and globally competitive 
products, including seed finance, prototype development, product promotion in national and 
international trade platforms, and incubation support. 
 Skill Development Programs: Design skill development programs in collaboration with industry 
and academia, specifically tailored for the manufacturing sector to enhance the competencies of the 
workforce. 
Proposed Solution and Initiatives 
Stabilize the disrupted global supply-chain 
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The pandemic, along with its widespread impact on the global supply chain, has compelled 
nations to embrace the "China+1" strategy for the production of essential goods. This shift presents a 
significant opportunity for India's manufacturers to emerge as a key global supplier. With escalating 
domestic demand and the imperative for other countries to diversify their sources to a cost-effective yet 
high-quality alternative to China, India's manufacturing sector has the potential to burgeon to $1 
trillion. This growth trajectory could concurrently generate up to 90 million jobs within the country by 
the year 2025. 
Focus more on tech-intensive, skill-intensive sectors 
Indian manufacturers, particularly Micro, Small, and Medium Enterprises (MSMEs), are urged to 
pivot their focus from labor-intensive to skill-intensive sectors, aligning with recent export trends that 
underscore the viability of such a transition. Notably, products such as Drugs and Pharma, Engineering 
Goods, and Electronic Goods have demonstrated substantial and healthy growth compared to the 
previous year23. 
In October 2023, when compared to the corresponding period in 2022, the export performance 
of these sectors is particularly noteworthy. Drugs and Pharma exports experienced an impressive surge 
of 
29.31%, signaling robust growth. Simultaneously, Engineering Goods exports displayed 
commendable growth, recording an increase of 7.2%. Electronic Goods exports outpaced the others 
with a substantial growth of 28.23%. 
These positive export trends highlight the potential and resilience of skill-intensive sectors, 
emphasizing the need for Indian manufacturers, especially MSME units, to strategically align their focus 
with the evolving market demands. Capitalizing on the growth opportunities presented by these 
dynamic sectors can contribute significantly to the overall success and competitiveness of the Indian 
manufacturing landscape. 
Strengthen operational efficiency 
The Indian manufacturing industry endured years of diminished productivity due to the 
stringent and opaque licensing system. It was only in the mid-1990s, when India opened its market, that 
the sector found a rare opportunity, benefitting from both support and increased demand. To harness 
this favorable climate, manufacturers must now focus on enhancing their operational efficiency to 
elevate the productivity of both labor and capital. 
A study conducted by McKinsey, analyzing 75 Indian manufacturers, emphasized the substantial 
potential for productivity improvements. For an average company, the findings indicated that there 
exists an opportunity for approximately 7 percentage points in additional returns on sales through 
enhanced operational efficiency. This underscores the imperative for Indian manufacturers to seize this 
opportune moment, align their operations with best practices, and unlock the untapped potential for 
increased productivity, contributing to the overall growth and competitiveness of the sector. 
Ease of accessing Capital at a lower cost for the MSMEs 
Micro, Small, and Medium Enterprises (MSMEs) stand as robust pillars supporting India's 
industrial economy, contributing significantly with approximately 45% of the manufacturing output 
and approximately 40% of the country's total exports. However, despite their vital role, access to credit 
for MSMEs remains challenging, characterized by rigidity, opacity, and time-consuming processes. 
In contrast to medium and large-scale industries, the MSME sector faces less favorable credit 
accessibility and higher costs for working capital. Addressing these challenges should be of the utmost 
priority for the government. Transparent and streamlined measures need to be implemented to 
facilitate a more comfortable and efficient credit environment for MSMEs. By doing so, the government 
can play a pivotal role in supporting and nurturing the highest contributing sector of the country's 
economy, fostering its sustained growth and resilience. 
Policy support 
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To bolster the Indian manufacturing sector, the government can play a pivotal role by 
formulating policies that foster rapid growth and enable seamless integration into the global market. 
Creating a protective environment against the challenges posed by large global manufacturers is crucial. 
Here are some considerations that the government might contemplate while drafting such policies: 
 Streamlining Excise Related Constraints: Simplifying excise-related constraints will empower 
Indian manufacturers to navigate the complexities of both import and export markets with greater 
ease, enhancing their competitiveness on a global scale. 
 Government Procurement Support: The government can boost demand for domestically 
manufactured goods by actively procuring a substantial portion of its requirements from Indian 
manufacturers. This approach not only stimulates economic activity but also provides economies of 
scale for the domestic industry. 
 Preference for Local Sourcing: Offering preferences to large manufacturing units that source a 
majority of their required components and materials from Indian MSMEs can incentivize stronger 
collaboration within the domestic supply chain, promoting growth across various sectors. 
 Incentives for Innovation: Providing financial and non-financial subsidies to MSMEs engaged in 
innovation and the development of technically advanced products can stimulate a culture of 
innovation within the manufacturing sector, making it more competitive on a global stage. 
 Support for Green Manufacturing: Encouraging and supporting environmentally sustainable 
practices in manufacturing through policies promoting "Green Manufacturing" aligns with global 
trends and can enhance the marketability of Indian products on an international scale. 
 Restrictions on Cheap Imports: Implementing strategic restrictions on the influx of low-cost 
imports from other countries, especially those that could undermine the competitiveness of 
domestic manufacturers, is crucial to safeguarding the interests of the Indian manufacturing sector. 
By incorporating these considerations into policy frameworks, the government can create an 
environment conducive to the growth and competitiveness of the Indian manufacturing sector, 
fostering a resilient and globally integrated industry. 
Conclusion  
India distinguishes itself from nations where the manufacturing sector takes precedence in 
driving the economy. Currently, the services sector holds a substantial share, contributing 55% to the 
GDP, marking a notable increase from the previous year's 45%. In contrast, the manufacturing sector 
has experienced a modest growth of merely 2%, advancing from 15% in 2017 to 17% in 2022. After 75 
years of colonial rule, India is poised to enter the economic premier league, surpassing the United 
Kingdom to become the world's 5th largest economy. The nation aspires to further climb the ranks, 
targeting the 3rd position by 2047, marking the centenary of its independence. 
According to the International Monetary Fund (IMF), India stands out as a beacon of economic 
resilience in a post-pandemic world. It holds the distinction of being the fastest-growing large economy 
in the coming decades. However, to reclaim its past economic glory from the pre-colonial era, India 
must redirect its focus towards fortifying the manufacturing sector, with a specific emphasis on Micro, 
Small, and Medium Enterprises (MSMEs), aiming to position itself as a global manufacturing hub. 
In pursuit of the economic objectives set for the upcoming years, fostering growth in 
manufacturing emerges as the singular imperative for India. With the implementation of strategic 
measures and unwavering execution, India's manufacturing sector has the potential to soar to US$4.5 
trillion, elevating its GDP share to 22%—a significant jump from the base prediction of US$2.5 trillion 
with a 17% GDP share. This trajectory presents both a necessity and an opportunity for India to reclaim 
its historical economic eminence. 
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