12 Years of Make in India- Growth, investment and manufacturing performance

The Make in India campaign completed 12 years on September 25, 2026. Data covering growth, investment, exports, and employment shows that manufacturing has made some progress, but its overall contribution to the Indian economy, employment, and global merchandise exports has remained broadly limited. Government Production-Linked Incentive (PLI) schemes have produced gains, but these gains are concentrated in a few sectors.

Why in the News?

The Make in India campaign was launched on September 25, 2014, with the aim of strengthening India's manufacturing sector.

• The campaign has completed 12 years.

• Manufacturing's share in economic growth, employment and global exports has remained largely unchanged.

• PLI schemes have generated significant investment, but gains are concentrated in a few sectors.

• Manufacturing employment increased only moderately between 2016-17 and 2025-26.

• India's share in global merchandise exports remained around 1.7% in 2025-26.

Manufacturing and Economic Growth

The manufacturing sector has not consistently grown faster than the overall Indian economy during the period.

• Under the old data series, manufacturing grew faster than the overall economy in only five of the 12 years.

• Under the new series, manufacturing grew faster in all three years for which data is available from 2023-24 to 2025-26.

• However, the gap between manufacturing growth and overall economic growth has been narrowing.

• Industrial Production data also shows limited outperformance by manufacturing.

Manufacturing Growth under IIP

The Index of Industrial Production (IIP) provides another measure of industrial performance.

• Under the old series, manufacturing growth exceeded overall IIP growth in only three of the 12 years.

• Under the new series, manufacturing growth was equal to overall IIP growth in 2023-24.

• It grew slower than the overall index in the following two years.

Manufacturing Share in the Economy

The contribution of manufacturing to India's overall Gross Value Added (GVA) has not increased significantly. This indicates that manufacturing has not undergone a major structural transformation in terms of its share in economic output.

Rising Exports but Flat Global Share

India's non-petroleum goods exports have increased significantly in absolute terms.

• Non-petroleum goods exports increased from $253.5 billion in 2014 to $388.3 billion in 2025-26.

• This represents an increase of around 53%.

• However, India's share in global merchandise exports has remained largely unchanged.

India's Share in Global Merchandise Exports

India had already increased its global export share substantially before the launch of Make in India, but the share has remained around the same level since 2013.

Investment Response

Private investment in manufacturing has not shown a strong and sustained increase. Investment is important because new factories, machinery and production facilities are needed to increase manufacturing capacity over time.

Gross Fixed Capital Formation

Gross Fixed Capital Formation (GFCF) measures spending on the creation of fixed assets such as machinery and other productive assets.

• Private-sector GFCF as a share of GDP was lower in 2023-24 than in 2014-15 under the old series.

• Under the new series, GFCF as a percentage of GDP has been declining since 2022-23.

• This suggests that private investment in productive capacity has not increased consistently.

Foreign Direct Investment

FDI in manufacturing has increased, but its growth has been slower than overall FDI in several years.

• Manufacturing FDI grew more slowly than overall FDI in seven of the 12 years considered.

• Manufacturing's share in total FDI increased from around 48% in 2014-15 to 55% in 2025-26.

• The increase indicates stronger manufacturing-related FDI participation, but the overall investment response remains uneven.

Capacity Utilisation

Capacity utilisation measures how intensively existing industrial capacity is being used. When factories are operating at higher levels of their available capacity, companies may have greater reasons to invest in new machinery and production facilities.

• RBI data shows capacity utilisation has been gradually increasing in recent years.

• However, it remains below the 80% level generally associated with the point at which companies are more likely to create additional capacity.

• Lower utilisation can reduce the immediate incentive for businesses to undertake fresh investment.

Bank Credit to Industry

Bank credit to industry has increased strongly in recent years. Credit provides businesses with funds for activities such as working capital, expansion and investment.

• Credit growth has been particularly strong for micro, small and medium enterprises (MSMEs).

• However, strong credit growth has not been matched by sustained rapid growth in manufacturing output.

• This has led to the view that some borrowing may be supporting working capital requirements rather than creating new productive capacity.

Impact of Production-Linked Incentive Schemes

The Production-Linked Incentive (PLI) schemes are among the areas where the government has recorded measurable results. The government launched 14 PLI schemes during 2020 and 2021 across different sectors.

• The schemes generated cumulative investment of around ₹2.4 lakh crore by March 2026.

• However, investment has been highly concentrated in a small number of sectors.

• The top five sectors account for nearly 83% of total investment under the schemes.

Major Sectors under PLI

This indicates that the impact of PLI schemes has been significant in selected industries rather than evenly distributed across manufacturing.

The five sectors accounting for most of the investment are:

1. Solar modules

2. Pharmaceutical drugs

3. Automobiles and auto components

4. Specialty steel

5. Large-scale electronics manufacturing

Employment Impact of PLI Schemes

PLI schemes have also generated employment, but employment gains are concentrated in a few sectors. Around 8.5 lakh people were employed under the schemes.

More than 86% of this employment came from:

• Food products

• Large-scale electronics manufacturing

• Pharmaceutical drugs

• Automobiles and auto components

• White goods

The government has also reported 5.7 lakh additional indirect jobs from three sectors:

• Large-scale electronics manufacturing

• IT hardware

• Solar modules

Overall Manufacturing Employment

The broader manufacturing employment data shows a relatively modest increase. The manufacturing workforce therefore increased by around 20 lakh during this period. However, manufacturing's share in total employment remained largely unchanged compared with a decade earlier.

Major Achievements

The 12-year period has produced some measurable gains.

• Non-petroleum exports increased significantly.

• Manufacturing FDI increased as a share of total FDI.

• PLI schemes attracted ₹2.4 lakh crore in investment.

• PLI-supported sectors generated substantial direct and indirect employment.

• Manufacturing growth has outpaced overall economic growth in some recent years.

• Credit availability to MSMEs has strengthened.

Major Challenges

Despite these gains, several challenges remain.

• Limited manufacturing share: Manufacturing's contribution to GVA has increased only marginally.

• Employment: Manufacturing's share of total employment has remained largely unchanged.

• Global exports: India's global merchandise export share remains around 1.7%.

• Private investment: GFCF has not shown sustained improvement.

• Capacity utilisation: Utilisation remains below the level associated with major fresh capacity creation.

• Sectoral concentration: PLI investment and employment are concentrated in a small number of sectors.

• Output growth: Higher industrial credit has not consistently translated into rapid growth in manufacturing output.

Conclusion

Twelve years of Make in India have produced visible gains in selected areas, particularly through PLI schemes, exports and investment in specific sectors. However, the broader transformation of manufacturing remains limited, with relatively little change in its share of economic output, employment and global exports. Sustained manufacturing growth will therefore depend not only on incentives but also on stronger private investment, productive capacity, employment generation and integration into global value chains.