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Introduction

India’s quest for strategic self-reliance has long been a cornerstone of its national policy, with manufacturing at its heart. In recent years, the country has been pursuing an ambitious agenda to boost domestic production, reduce reliance on foreign imports, and position itself as a global manufacturing hub. The “Atmanirbhar Bharat” (Self-reliant India) initiative, launched by Prime Minister Narendra Modi in 2020, aims to accelerate this vision by fostering indigenous production across various sectors, including defence, electronics, pharmaceuticals, and consumer goods. The challenge, however, lies in translating this ambition into tangible outcomes. While significant strides have been made, India’s manufacturing ecosystem still grapples with deep-rooted structural issues and competitive pressures from global markets. This article critically examines the evolution of India’s manufacturing sector in its pursuit of strategic self-reliance and assesses the extent to which it has succeeded in achieving global competitiveness.

Keywords : Competitiveness, Manufacturing, Ecosystem, Leveraging

Description

The Genesis of India's Manufacturing Vision: Atmanirbhar Bharat

The concept of self-reliance is not new to India. The country’s first Prime Minister, Jawaharlal Nehru, envisioned an industrialised India that could produce the goods necessary for its development, relying less on foreign imports. However, over time, the country’s manufacturing sector became heavily dependent on foreign imports, particularly in critical sectors like defence and electronics. The post-1991 liberalisation era further accelerated India’s integration into the global economy, with the country increasingly becoming a consumer market rather than a producer.

The launch of the Atmanirbhar Bharat initiative marked a paradigm shift. The government’s approach under this policy is multifaceted, aiming to enhance domestic manufacturing capabilities, reduce dependency on imports, promote innovation, and develop global competitiveness. The focus is on achieving self-reliance in key areas, notably defence, infrastructure, pharmaceuticals, electronics, and renewable energy. It is underpinned by key measures such as the Production-Linked Incentive (PLI) schemes, aimed at incentivising manufacturers to set up production facilities in India.

Real-World Developments in Key Sectors

Several sectors have seen notable progress in India’s drive towards manufacturing self-reliance. These developments reflect the country’s potential but also highlight the challenges it faces in achieving global competitiveness.

1. Defence Manufacturing: A Strategic Imperative

India’s defence sector has been one of the key priorities of the Atmanirbhar Bharat campaign. Historically, the country relied on imports to meet its defence needs, particularly in areas such as aircraft, naval vessels, and high-tech weaponry. This dependency posed significant strategic vulnerabilities, particularly in times of geopolitical tensions.

In recent years, however, the government has implemented several reforms to promote indigenous manufacturing in defence. The Make in India initiative has helped foster partnerships between private companies and state-owned enterprises to develop defence systems. Notable examples include the production of the Tejas fighter jet by Hindustan Aeronautics Limited (HAL), and the Akash surface-to-air missile by Bharat Dynamics Limited (BDL). The PLI scheme has also been extended to the defence sector, incentivising private sector participation.

However, despite these advances, India remains heavily reliant on foreign imports for high-tech defence equipment, including advanced aircraft and submarines. The slow pace of technological advancements, bureaucratic hurdles, and the lack of a comprehensive defence innovation ecosystem continue to impede the sector's full potential. While the goal of achieving self-reliance is within reach, it will require sustained investment in research and development (R&D) and public-private collaboration.

2. Electronics and Technology: The Digital Challenge

India’s electronics sector has grown significantly in recent years, driven by the global demand for smartphones, semiconductors, and consumer electronics. The PLI scheme for electronics manufacturing is aimed at turning India into a global hub for mobile phone production, with companies like Foxconn, Wistron, and Pegatron setting up manufacturing plants in India. India’s smartphone production capacity has grown from approximately 60 million units in 2014 to over 300 million units in 2020, making the country the second-largest producer of mobile phones in the world, only behind China.

However, the electronics manufacturing ecosystem in India is still highly reliant on imports for critical components, such as semiconductors and display panels. The Semicon India programme, launched in 2021, aims to establish semiconductor manufacturing facilities in India to reduce reliance on imports. While this initiative has garnered attention, India faces significant competition from other manufacturing hubs, such as China and Taiwan, which already have well-established semiconductor industries.

The electronics sector's ability to compete globally will depend on its capacity to innovate, reduce production costs, and attract investments in advanced manufacturing technologies such as automation and robotics. Additionally, India must establish a robust supply chain for critical components, particularly in the semiconductor space, to reduce vulnerabilities and bolster its self-reliance.

3. Pharmaceuticals: A Global Supplier with Self-Reliance Ambitions

India has long been a global leader in pharmaceuticals, particularly in generic drugs. The country’s pharmaceutical industry is the world’s third-largest by volume and is often referred to as the “pharmacy of the world.” India’s ability to manufacture affordable medicines, especially during the COVID-19 pandemic, underscored its importance to global healthcare systems. In 2020, India supplied more than 60% of the world’s vaccines, making it the largest producer of vaccines globally.

While India’s pharmaceutical industry is highly competitive and self-reliant in terms of manufacturing generics, challenges remain in the production of high-end drugs and medical devices. The Indian pharmaceutical sector continues to face difficulties in gaining access to advanced technologies and raw materials, which are often controlled by foreign firms. The government’s Pharmaceuticals Vision 2020 seeks to address this by promoting R&D and manufacturing in high-value areas, including biologics and biosimilars. However, the sector must invest more heavily in developing advanced technologies and R&D capabilities to remain globally competitive.

4. Renewable Energy: Green Manufacturing and Global Markets

The renewable energy sector is another area where India is striving to achieve self-reliance. India has set ambitious targets to increase its renewable energy capacity, particularly solar and wind power. The country has the potential to become a global leader in renewable energy manufacturing, thanks to its vast resources and growing demand for clean energy.

India has already made progress with the Make in India initiative for solar panels and components. Companies like Adani Green and Tata Power Solar have established themselves as key players in solar panel manufacturing. However, challenges persist in scaling up the production of high-efficiency solar panels, battery storage systems, and electric vehicles (EVs), where India still lags behind global competitors like China. The government’s PLI schemes for solar and battery storage are steps in the right direction, but much remains to be done to build an integrated green manufacturing ecosystem.

Challenges Hindering Global Competitiveness

While India has made significant strides in building its manufacturing capabilities, several challenges continue to hinder its global competitiveness:

• Infrastructure and Logistics: Despite improvements, India’s infrastructure remains a bottleneck. Poor logistics, inadequate supply chain networks, and delays in project execution increase production costs and undermine global competitiveness.
• Skill Development: India’s manufacturing sector faces a shortage of skilled labour in high-tech areas such as electronics, aerospace, and robotics. Although the government has made efforts to bridge this gap through skill development initiatives, the pace of progress remains slow.
• Regulatory Hurdles: India’s complex regulatory environment, characterised by cumbersome procedures, high taxes, and inconsistent enforcement, remains a major deterrent for both domestic and foreign investment in manufacturing.
• Innovation Ecosystem: India’s innovation ecosystem is still nascent, particularly in sectors like defence and high-tech electronics. A lack of collaboration between industry, academia, and government impedes the country’s ability to develop cutting-edge technologies.

Conclusion

India’s journey towards leveraging indigenous manufacturing for strategic self-reliance and global competitiveness has come a long way, but significant challenges remain. The country’s manufacturing ecosystem has made notable progress in sectors such as defence, electronics, pharmaceuticals, and renewable energy. However, achieving true self-reliance and global competitiveness will require sustained investment in infrastructure, R&D, and human capital development, alongside regulatory reforms and improved collaboration between the public and private sectors.

India’s aspiration to become a global manufacturing powerhouse is not without its hurdles, but the ongoing reforms, the drive for innovation, and the evolving policy landscape provide optimism. As the world shifts towards a multipolar economic order, India’s ability to harness its manufacturing potential will be key to its role in global supply chains and its strategic autonomy in the 21st century.