India’s manufacturing sector has come a long way since the Modi government’s ‘Make in India’ initiative was launched a decade ago on September 25, 2014. The program, designed to transform India into a global manufacturing hub, has witnessed significant advancements. As India marks 10 years of this flagship initiative, Commerce Minister Piyush Goyal spoke with CNBC-TV18, outlining the key achievements and the road ahead for India’s manufacturing landscape.
Goyal highlighted that India is now recognised as a crucial player in high-tech and emerging technologies. This transformation is visible in India’s space sector, with startups and ISRO collaborating to position India as a manufacturing destination for global space needs. This growth is mirrored in other sectors as well, particularly in sustainable manufacturing, where India is actively pushing for green energy solutions and sustainable products like green steel.
“The four Ds—decisive leadership, huge demand, a demographic dividend, and a vibrant democracy—have created a compelling case for international collaborations in manufacturing,” Goyal said. He pointed out that India offers global companies the advantages of scale, skilled labour, and a stable policy environment. With these factors in place, India provides a platform for foreign firms to ‘Make in India’ at competitive prices and export to global markets.
Reflecting on the program’s journey, Goyal highlighted the immense transformation in India’s economic landscape. He acknowledged that in 2014, India was grappling with high inflation, low growth, and a lack of investor confidence. Corruption scandals further eroded trust in India’s economic potential. However, the Modi government’s commitment to rejuvenating the manufacturing sector has paid off over the last decade.
From the introduction of production-linked incentive (PLI) schemes to the launch of the semiconductor mission, the focus on ease of doing business, and the development of 20 industrial smart cities, the government has been relentless in its reforms. “We’ve doubled our manufacturing output, maintained its share in GDP, and sustained momentum despite challenges like the COVID pandemic and global disruptions,” Goyal noted.
Make in India has also played a crucial role in encouraging the startup and innovation ecosystems, empowering India to emerge as a leader in sectors like semiconductors, defense, and renewable energy. According to Goyal, these efforts have created jobs, fostered innovation, and ensured that India’s manufacturing sector contributes to the vision of a ‘Viksit Bharat’ (developed India) by 2047.
Regarding potential new PLI schemes, Goyal noted that the government is continuously assessing different sectors. If additional support is needed, it will be provided to maintain India’s competitive edge. “Prime Minister Modi is committed to creating opportunities for our youth and startups, and this government will always support manufacturing to create jobs and drive innovation.”
Below is the verbatim transcript of the interview.
Q: Let me begin by asking you about the biggest wins that you consider from the Make in India program, and the biggest lessons?
Goyal: It is a momentous day that we are celebrating 10-years of Make in India. A program that Prime Minister Narendra Modi had initiated to reinvigorate job creation and give an impetus to the economy.
We had inherited a very fragile economy, the mood was down, investors were not looking at India as a favoured destination, whether domestic or international. And with the high inflation, low growth rates, high interest rates, foreign currency exchange reserves being down and also an instable rupee. With corruption scandals all over the place tumbling out of the closet, we found manufacturing to be a terribly neglected sector.
When Prime Minister Modi first talked about making in India and growing the economy through manufacturing, many people found it very difficult to believe.
I think during the 10 years under his visionary leadership, we have been able to introduce several new initiatives, whether it is the production linked incentive (PLI) program to support very critical sectors, to grow the semiconductor mission, our focus on ease of doing business, our effort to decriminalise laws, reduce the compliance burden, the setting up of 20 industrial smart cities, townships, or our courage of conviction to be able to offer corruption-free government. I think all of these and many more measures encouraged the startup ecosystem, the manufacturing ecosystem, the innovation ecosystem. And today, 10 years later, despite two wars and two years lost in COVID, we have been able to maintain the manufacturing momentum. As the economy grew by 90% during this decade, we have also grown manufacturing and doubled it so that our share of manufacturing is maintained.
Going forward, given the strong macroeconomic fundamentals and the collective commitment of domestic and international investors, with the government hand-holding them, we are very confident of taking this up in the Amrit Kaal to contribute significantly to the making of Viksit Bharat, a developed and prosperous nation by 2047.
Q: Currently the share of manufacturing in our GDP is 17%. Now, when it comes to the next five years, what is the big idea or manufacturing push that we can expect from the Indian government?
Goyal: India is increasingly being recognised as an important partner for high-tech and emerging technologies. In fact, today we were at a space center and our Indian startups, our Indian in-space agency and our ISRO facilities collectively are offering a very, very compelling case to promote manufacturing in India for the space requirements of the world.
Similarly, towards sustainability, whether it’s the equipment required for green energy, whether it is the promotion of a sustainable product like green steel, we are looking forward to India’s contribution in a very big way. So much so that today, the Indian manufacturing provides an immense opportunity for the developed world to partner with India so that they can make in India using the technologies and innovations that they have developed. Making in India will help them produce at scale and benefit from the economies of scale, will help them get the best of manpower talent, manpower skills, management capabilities so that they can run efficiently.
It also offers them the possibility to export from India at competitive prices. In a way, the four Ds, decisive leadership of the government led by Prime Minister Narendra Modi, huge demand of 140 crore Indians aspiring for a better quality of life, the demographic dividend with a young population, two-third of our people in the working age expected to remain young, and the advantage of a vibrant democracy. The rule of law, which safeguards their interests, their security, and stability of policy and predictability of government action. All of these make for a great thrust to international collaborations on manufacturing.
Q: The Prime Minister has just completed a very successful visit to the United States. And as a result, we are looking at a watershed agreement in semiconductor manufacturing with the support of the US military. How do you think this relationship is going to lead to more manufacturing in India across sectors in the next few years? Any key sectors or any kind of investments that you can indicate to us, which are going to come out of this visit to the United States?
Goyal: The Prime Minister deserves kudos and I congratulate him for a historic visit to the United States of America. The Quad in Delaware, the engagements with the CEOs of Fortune 500 US companies, the Modi and US event in Long Island, it’s truly been a phenomenal visit, successful in the outreach. Prime Minister Modi has clearly emerged as the tallest world leader today, the most sought after, and somebody who is looked upon for his leadership, for his vision, and for his guidance to solve geopolitical problems.
During this visit, he has also participated in witnessing our joining the IPEF pillars and the overarching agreement, and also had extensive discussions around emerging technologies, the semiconductor mission that we are focused on in India, and broadly, the visit is going to set the agenda for promoting partnerships between US companies and India to increasingly source from India, to increasingly set up facilities for modern, contemporary manufacturing in critical sectors, emerging technologies, sustainability. And I’m very confident that as we are increasing our supplies to very high-tech companies like Boeing, Micron, designing and producing for the best of companies in the US, supplying critical components for their important missions, the space technology collaboration between the two countries, in several areas, the United States and India stand together to work as strategic partners and work together to serve the world.
Q: President Biden has imposed very high tariffs on a range of Chinese products, including electric vehicles, where the tariffs are going to be as high as 100%. Trump has promised to increase tariffs to up to 60% on Chinese products if elected. Considering that India and US are working so closely together, do you also consider tariffs on Chinese products in order to boost Indian manufacturing, local manufacturing?
Goyal: That’s a decision which we will take after due consideration of all aspects. As of now, I can assure you that Indian manufacturing stands on its own legs. Indian manufacturing is competitive, offers competitive advantages to other nations, and as I said, with the large demand, you can get economies of scale from the domestic requirement as well as once you overlay that with international demand from friendly countries like the US, Europe, Australia, the ASEAN region or Japan and Korea, Russia. I think we have immense potential to promote manufacturing.
Decisions around tariffs are taken in consultation with all the ministries and taken at the appropriate level.
Q: When it comes to the China+1 opportunity, countries and companies have been saying for the last five years that India’s time has definitely come. But considering our disturbed relationship with China, would you consider any changes in our policy vis-à-vis China in terms of allowing investments in manufacturing via the automatic route?
Goyal: No such proposal at all. We have a framework in place for any Chinese investments and they will continue to have to go through that framework.
Q: Any particular sectors where you expect manufacturing to be boosted significantly by the government in the next five years, any new PLI schemes that we can expect?
Goyal: I think we will continue to look at different sectors to see where we can give that competitive edge through any support that may be required. You will recall that after the initial PLI schemes, we came out with the semiconductor mission and the additional support for the semiconductor industry. We are currently assessing different sectors and if at all it is required to support any particular sector, I think the government will not be found wanting.
Prime Minister Modi is committed to providing jobs for the youth of India, to create new opportunities for our startups, to create an ecosystem of innovation in the country. And I’m sure that this government committed to a bright future for the youth of India will always be there to support manufacturing.
Make in India over the last 10 years has been a flagship of the government of India, but I’m sure going forward, manufacturing in India, and the Make in India program, supplemented with the Serve from India, the Design in India, the Innovate in India program, the whole holistic ecosystem will provide a natural source of goods and services.
Q: Any target, that you would like to set in terms of manufacturing share in our GDP or exports? Something that you have been pushing personally?
Goyal: I think we already have an export target of $2 trillion by 2030. We are well on track with increasing services, particularly at a very good pace. On manufactured goods also, we had very high increases for a couple of years. We have consolidated over last year. We will again see growth in the current year and are hopefully well on track to reach the $2 trillion target by 2030. The government is fully on top of this target, working closely with all our exporting community.
In terms of manufacturing, when the economy grew by 90%, despite the global economy growing only by 35%, I’m glad that manufacturing was able to keep pace and doubled during this period. Going forward in the Amrit Kaal, as we move towards Viksit Bharat 2047, I’m sure manufacturing will increasingly provide jobs and economic activity to help India achieve the Viksit Bharat goal, and the share of manufacturing in a $30-35 trillion economy will also go up from 17% to closer to 25%.
Q: You are in Australia. India is going to be setting up an office in Australia to facilitate trade. An Invest India office will be opened up in Singapore as well. Is this going to be a way of driving trade with other countries? Are we going to see more such offices being opened abroad?
Goyal: I just opened a Singapore office on Sunday. I’m planning to open an office in Sydney, which I have announced yesterday. We are looking at opening an office in Dubai, Abu Dhabi, UAE very soon. An office in Saudi Arabia, Zurich, New York, we’ve identified about 10 locations where we will have Vibrant India centers to promote investment, trade, technology, and at a later stage, tourism.
Invest India at the fulcrum will be supported by NICDC, the organisation developing 20 industrial smart cities. We’ll also be having ECGC, the Export Credit Guarantee Corporation, looking for more business and expanding its activities through these offices. We are going to look at our trade officers also being positioned there, and in some sense, giving a one-stop shop, whether to procure land, to entice people to come and invest, to manufacture in India, to have facilities for design innovations, service centres, global capacity centres. The entire job creating ecosystem is sought to be attracted through these offices, outreach program, which if it’s successful, will be expanded to other areas and other continents around the world.
Q: As part of India’s next five-year roadmap, e-commerce is also extremely important. And you’ve always said that we’ll have a policy which protects our domestic retailers as well. Today, there are some concerns around quick commerce. How would you address that in the days to come?
Goyal: I think largely quick commerce will have to have the local kirana store, the corner store, the small retailer for last mile delivery, if they want to sustain in the long run and not make losses. By making losses in the initial period, they may be able to capture some eyeballs or some business. They may be able to build up valuation, but ultimately in the long run, a sustainable model of quick commerce will necessarily integrate the local retailer. My only request to all e-commerce companies is to go by the law, go by the letter and spirit of the law, and we are fine with it. We want to encourage technology, we want to encourage modern trade, but not at the cost of the small retailers.
ONDC, the Open Network for Digital Commerce is going to make a significant expansion in the days to come. We have requested RS Sharma to join as non-executive chairman. He’s revamping the ONDC to suit small retailers and give them a bigger opportunity to participate in e-commerce. I’m very confident about the e-commerce story.
Q: Any message to the private sector, that you would want to leave us with when it comes to manufacturing?
Goyal: I think this is your government. We are your representatives and partners. We encourage you, particularly the domestic private sector, to invest faster, to invest more, get into manufacturing of technology products, get into manufacturing of goods required for infrastructure development, consumption goods, white goods, fast-moving consumer goods, the entire spectrum offers opportunities.
A growing economy, and the aspirations of 140 crore Indians will give you a naturally big market. And at that scale, you will be competitive across the world. Make in India is our mantra, is our mission. Join us in the Make in India mission, and let’s partner to make India atmanirbhar, self-reliant, make India strong, and go out there and compete with the world from a position of strength.
