NITI Aayog has called for greater use of cluster-based manufacturing and integrated industrial parks to help India achieve scale, reduce production costs and strengthen its position in global manufacturing.
The proposed parks would offer shared infrastructure, utilities and faster approvals to manufacturers.
The think tank described manufacturing as a key avenue for creating productive employment for India’s young workforce, whose median age is around 28.
It said the sector can generate formal jobs across skill levels while improving productivity through technology and better production processes.
Its study, ‘Key Sectors to Position India as a Global Manufacturing Hub’, identifies 12 sectors where India could seek global leadership by 2047.
These include electronics, telecom equipment, solar photovoltaics, pharmaceuticals, chemicals, automobiles, defence and drones, steel, capital goods, textiles, food processing, and leather and footwear.
The first volume examines chemicals, textiles, telecom and network equipment, and solar photovoltaics in detail.
Focus on domestic value addition and exports
The report recommends reducing import dependence through targeted incentives and viability gap funding, increasing domestic value addition, encouraging joint ventures and technology transfers, and improving labour productivity. It also calls for wider export markets and balanced free trade agreements.
NITI Aayog Vice-Chairman Ashok Lahiri stressed that India needs to focus on economies of scale and scope while relying primarily on private-sector investment. He said the government’s role should be to remove barriers and create conditions in which businesses can invest profitably.
For solar manufacturing, the report highlighted India’s heavy dependence on the US, which accounted for 97% of solar module exports between 2019-20 and 2025-26. It recommended expanding into polysilicon and wafer production and diversifying export destinations.
In chemicals, the report identified products such as phenol, methanol and acetic acid for reducing import dependence. The government is also working on chemical parks with shared infrastructure.
For textiles, NITI Aayog called for higher productivity through skilling, technology adoption and labour welfare.
It recommended apprenticeships, industry-academia partnerships and better accommodation for migrant workers, while encouraging a shift towards man-made fibres to help achieve a $100 billion textile export target by 2029-30.
