Amidst escalating trade tensions spurred by tariffs imposed by the Trump administration, the Indian government is doubling down on its commitment to bolstering domestic manufacturing. Prime Minister Modi recently emphasized the critical importance of "Mission Manufacturing," a strategic initiative designed to enhance the efficiency and global competitiveness of local production. This renewed focus comes as businesses grapple with the disruptive impact of increased tariffs on imports, and is intended to strengthen India's position in the global economy.
The impetus for "Mission Manufacturing" stems from a combination of factors, including the challenges posed by protectionist trade policies and a long-term vision to elevate India as a global manufacturing hub. Trump's tariffs, which have significantly impacted various sectors, including textiles and apparel, have prompted concerns about cost competitiveness and potential production halts. The recent notification by the US Department of Homeland Security about increasing tariffs to 50% on Indian goods has further intensified these concerns.
"Mission Manufacturing" is not a novel concept but rather a revitalized approach building upon the "Make in India" initiative launched in 2014. While "Make in India" aimed to encourage companies to develop, manufacture, and assemble products within the country, it faced structural challenges such as inadequate infrastructure, complex regulations, and reliance on imports for critical components. The new mission seeks to address these shortcomings through targeted interventions and policy support.
The vision of "The Manufacturing Mission" is to establish a robust manufacturing sector, attract investment, foster innovation and create an ecosystem that is conducive for domestic production. The initiative aims to increase the contribution of the manufacturing sector to 25% of the GDP.
A key component of this strategy is the Production Linked Incentive (PLI) Scheme, a flagship initiative designed to elevate the manufacturing sector's contribution to the GDP and position India among the world's premier manufacturing powerhouses. With an incentive outlay of ₹1.97 lakh crore and 806 applications approved across 14 strategic sectors, the PLI scheme demonstrates industry confidence and uptake. The scheme aligns with national priorities such as Atmanirbhar Bharat (self-reliant India) and the goal of achieving a $5-trillion economy. The PLI scheme fuels Make in India, powers Digital India via electronics and mobile manufacturing, and complements the ₹76,000-crore India Semiconductor Mission to bolster local chip design, fabrication, and display production.
India is also making strides in the semiconductor industry, with the Indian Semiconductor Mission (ISM) approving ten projects to galvanize the semiconductor ecosystem. These projects range from fab investments by Tata Electronics Private Limited to assembly, testing, marking, and packaging (ATMP) plants.
The current trade landscape is complex. While the U.S. has imposed tariffs on various goods, it has also reached agreements with other regions to lower tariffs on certain goods. Simultaneously, China, long considered the "world's factory," is undergoing a transition from low-cost, labor-intensive exports to higher-value, technology-driven production. This shift, coupled with challenges in the property sector and weak consumer confidence, has led some manufacturers to relocate to countries like Vietnam and India.
"Mission Manufacturing" represents a strategic response to both external pressures and internal aspirations. By prioritizing efficiency, innovation, and self-reliance, India aims to not only weather the storm of global trade disputes but also emerge as a more competitive and resilient manufacturing force.
