New Delhi, April 28: India is accelerating a strategic shift towards infrastructure-led, integrated manufacturing hubs as part of its broader plan to transform into a global industrial powerhouse by 2047, according to a policy note released by the Press Information Bureau on Tuesday.
The move marks a departure from traditional project-based industrialisation towards large-scale, ecosystem-driven manufacturing clusters designed to enhance reliability, reduce costs, and strengthen India’s position in global value chains. The approach is backed by a sharp increase in public capital expenditure and a series of targeted policy interventions announced in recent Union Budgets.
Manufacturing central to growth ambitions
Manufacturing currently contributes about 16–17% to India’s GDP and employs more than 27 million workers. As the country aims to expand into a $30–35 trillion economy by 2047, policymakers expect the sector’s share to rise to at least 25%, making it a central pillar of economic growth.
Officials say this ambition is being pursued through the development of integrated manufacturing hubs—large, coordinated industrial ecosystems that combine physical infrastructure, logistics, regulatory support, and supply chain linkages. These hubs are intended to enable firms to operate at scale while improving productivity and competitiveness.
The policy shift comes at a time when global manufacturing is undergoing structural transformation. The Ministry of Finance, in its Economic Survey 2025–26, noted that competitiveness is increasingly defined not by low-cost production but by reliability, resilience, and technological capability.
Infrastructure push underpins strategy
A key enabler of this transition has been the significant rise in government capital expenditure, which has grown from ₹2 lakh crore in 2014–15 to a budgeted ₹12.2 lakh crore for 2026–27. This surge has supported the development of industrial parks, logistics networks, and multimodal connectivity essential for large manufacturing ecosystems.
The government’s integrated planning platform, PM Gati Shakti National Master Plan, is playing a central role in coordinating infrastructure projects across ministries and states, reducing bottlenecks and ensuring time-bound execution.
India is already emerging as a preferred global manufacturing destination, currently ranked as the third most sought-after location worldwide. The composition of production is also evolving, with medium- and high-technology sectors accounting for over 46% of manufacturing value added.
Multi-layered manufacturing ecosystem
India’s manufacturing hub landscape is increasingly diversified, comprising multiple models tailored to sectoral and regional needs.
At the top tier are large integrated manufacturing hubs—master-planned industrial zones offering plug-and-play infrastructure and shared utilities. These include projects under the National Industrial Corridor Development Programme, which has approved 20 industrial smart cities across seven corridors and 13 states. Four of these—Dholera, Shendra-Bidkin, Greater Noida, and Vikram Udyogpuri—have already been completed, while others are under development.
Another key initiative is the PM MITRA scheme, under which seven mega integrated textile parks are being developed across states such as Tamil Nadu, Gujarat, and Maharashtra. These parks aim to consolidate the entire textile value chain—from processing to logistics—within a single ecosystem.
Sector-specific hubs and high-tech push
In addition to multi-sector hubs, the government is promoting sector-specific ecosystems in areas requiring specialised infrastructure. These include bulk drug parks, semiconductor manufacturing clusters, and biopharma hubs.
Under the Biopharma SHAKTI initiative, the government has announced an outlay of ₹10,000 crore over five years to develop India as a global biopharmaceutical manufacturing hub. Similarly, dedicated schemes are supporting electronics manufacturing and semiconductor ecosystems to strengthen domestic capabilities in critical technologies.
The Union Budget 2026–27 has further reinforced this approach, proposing the establishment of three chemical parks and continued support for industrial clusters and shared facilities.
MSMEs remain backbone of manufacturing
Micro, Small and Medium Enterprises (MSMEs) continue to play a pivotal role in the manufacturing ecosystem. With over 7.47 crore enterprises, the sector accounts for 35.4% of manufacturing output, nearly half of exports, and over 31% of GDP.
MSME clusters, particularly in Tier-2 and Tier-3 cities, are seen as critical to the success of manufacturing hubs. These clusters benefit from local skills, supplier networks, and cost advantages, and are supported under schemes such as the Micro and Small Enterprises Cluster Development Programme.
Officials note that strengthening MSME participation ensures that manufacturing growth is broad-based and inclusive, rather than concentrated in a few large industrial centres.
Corridors driving spatial integration
Complementing these hubs are large industrial corridors that provide trunk infrastructure and logistics connectivity across regions. Key corridors include the Delhi–Mumbai, Chennai–Bengaluru, Amritsar–Kolkata, and Visakhapatnam–Chennai corridors, which are designed to integrate manufacturing hubs with ports, highways, and freight networks.
These corridors enable large-scale industrial concentration while improving supply chain efficiency and reducing logistics costs—factors critical for global competitiveness.
State capacity and execution key challenges
The effectiveness of manufacturing hubs, however, depends heavily on state-level execution, including land availability, regulatory approvals, and infrastructure provisioning. To address these challenges, the government has introduced institutional mechanisms such as the India Infrastructure Project Development Fund and the National Infrastructure Enablement Index.
State governments are also playing a crucial role in driving sector-specific hubs. For instance, Uttar Pradesh is developing a defence industrial corridor, Tamil Nadu has expanded automobile and electronics clusters, and Gujarat continues to attract investment through port-linked manufacturing hubs.
Policy shift towards ecosystem-driven growth
The policy framework underpinning this transformation reflects a broader shift from firm-level incentives to ecosystem-based development. Initiatives such as industrial corridors, digital logistics platforms, and integrated parks aim to reduce coordination failures and improve efficiency across the manufacturing value chain.
According to the PIB note, this approach is designed to minimise logistics friction, reduce financing delays, and ensure seamless coordination among stakeholders—key constraints that have historically hindered industrial growth in India.
Outlook: Manufacturing as engine of ‘Viksit Bharat’
As India moves towards its long-term goal of becoming a developed nation, manufacturing is expected to play a decisive role in driving growth, employment, and exports. The increasing focus on integrated hubs, infrastructure investment, and regional diversification signals a strategic recalibration of industrial policy.
With continued emphasis on Tier-2 and Tier-3 cities, improved connectivity, and coordinated policy support, officials believe India’s manufacturing sector is well-positioned to expand its global footprint while ensuring inclusive and sustainable growth.
The success of this strategy, however, will depend on sustained investment, efficient execution, and the ability to adapt to rapidly evolving global industrial dynamics.
