India's Mfg Push: Survey Eyes 25% GDP Share by 2035

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AuthorRiya Kapoor|Published at:
India's Mfg Push: Survey Eyes 25% GDP Share by 2035
Overview

India's Economic Survey 2025-26 advocates a manufacturing sector driven by scale, technology, and global integration, moving beyond protectionist policies. The ambitious vision targets manufacturing's share in GDP to double to 25% by 2035. Key initiatives like Production Linked Incentive (PLI) schemes, the National Manufacturing Mission, and infrastructure upgrades are central to this strategy. The survey projects continued robust GDP growth for India amidst a fragile global economy, underscoring the critical role of innovation and strategic resilience.

1. THE SEAMLESS LINK

India's industrial future hinges on a strategic pivot from protectionism towards achieving scale, embedding advanced technology, and integrating deeply into global value chains. This transition is highlighted in the Economic Survey 2025-26, which frames manufacturing as a critical engine for sustained economic expansion and global competitiveness. The report projects India as the world's fastest-growing major economy, even as global conditions remain uncertain.

The Innovation Imperative

The survey emphasizes a shift from technology adoption to innovation-led manufacturing to foster a high-productivity hub. The Anusandhan National Research Foundation (ANRF) is positioned to bolster R&D, encouraging collaborations between industry and academia to drive technological advancement and capability development in strategic sectors. This focus is crucial as high-tech activities already constitute 46.3% of India's manufacturing value-added. While manufacturers recognize technology's importance for profitability, current investment allocation remains modest, though projected to increase.

Policy Pillars for Growth

The cornerstone of the government's strategy is the Production Linked Incentive (PLI) scheme. By September 2025, PLI schemes across 14 sectors had attracted nearly ₹2 lakh crore in actual investments, generating over ₹18.7 lakh crore in incremental production and sales, and creating more than 12.6 lakh jobs. The survey reiterates the importance of continuing these targeted, scale-linked incentives. Complementing this are infrastructure development initiatives like PM GatiShakti and the National Industrial Corridor Development Programme, deemed essential for reducing logistics costs and enhancing supply chain reliability [cite: News1]. A proposed National Manufacturing Mission aims to serve as a long-term blueprint for expanding capacity and integrating MSMEs into wider value chains [cite: News1].

Ambitious Targets and Global Positioning

The survey sets an ambitious goal to double manufacturing's share in India's GDP to 25% by 2035 [cite: News1]. This requires overcoming persistent challenges, including lower productivity and infrastructure gaps compared to global peers. India currently accounts for only about 1.8% to 2.9% of global manufacturing output, significantly trailing China's dominance. The survey acknowledges the need for a strategic approach, shifting from 'Swadeshi' towards 'Strategic Indispensability' to ensure India becomes a preferred global supplier.

Outlook: Scale and Resilience

The path forward emphasizes competitiveness driven by technological capability and reliability rather than solely low-cost labor. The survey underscores the necessity of stable, innovation-friendly policies, sustained reforms in ease of doing business, R&D, skilling, and infrastructure. Strengthening MSME integration into value chains is also critical for sustained growth and job creation. With the survey projecting India's GDP growth at 7.4% for FY26, the manufacturing sector is positioned as a key driver of this sustained economic momentum, albeit requiring continuous focus on productivity and integration into global markets.

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