A NITI Aayog report outlines strategic sectors, highlighting chemical, textile, telecom, and solar industries, as India aims to boost productivity and competitiveness to challenge China’s dominance in global manufacturing.
India must scale up manufacturing, lift productivity and push deeper into global supply chains if it wants to challenge China’s dominance, according to a NITI Aayog report released on Thursday. The study says India’s share of global manufacturing value added rose from about 1.5% in 1995 to just 3.2% in 2023, while China’s climbed from roughly 5% to nearly 32% over the same period. NITI Aayog vice chairman Ashok Kumar Lahiri said the goal was not simply to make more goods, but to build “productive capacity”, strengthen competitiveness and expand India’s role in global markets.
The report, titled “Key sectors to Position India as a Global Manufacturing Hub Volume-1”, examined 62 manufacturing sectors and identified 12 with the strongest potential to help India become a global leader. Those sectors include automobiles, chemicals, capital goods, electronics, pharmaceuticals, defence and drones, food processing, textiles, steel, leather and footwear, telecom equipment and solar photovoltaic manufacturing. The first volume focuses on chemicals, textiles, telecom and network equipment, and solar PV, while later volumes will cover the remaining eight.
Chemicals stand out as a major opportunity, with India seeking to benefit as companies diversify away from China. NITI Aayog said India held about 8% of the major import market in 2024 and that domestic chemical consumption could rise to $290 billion to $310 billion by FY2030. The report said output in the sector would need to grow by about 14% a year to capture that demand. Textiles also offer scope for expansion, with India the sixth-largest exporter of textile and apparel products and holding a 4.1% share of global exports in 2024. But the report said gains will depend on higher productivity, greater use of man-made fibres, modernised micro, small and medium-sized enterprises and wider market access.
Telecom equipment and solar manufacturing present two more strategic openings. India exported only $0.6 billion to $1 billion of telecom equipment a year between 2020 and 2024, while imports were worth $4 billion to $5 billion, and more than 80% of critical components came from China, the report said. It called for more local component production, technology transfer, joint ventures and industrial clusters. In solar PV, NITI Aayog said module capacity had risen to 100 gigawatts in August 2025 from 2.3 GW in 2014, while cell capacity had increased to 25 GW from less than 1.2 GW. Even so, the report said India must build a stronger domestic ecosystem if it is to compete globally as demand for solar installations rises.
Across all the sectors, the report points to the same structural obstacles: dependence on imports, fragmented supply chains, weak logistics, limited value addition, technology gaps and shortages of skilled labour. NITI Aayog said India must move beyond “assembly-led or low-value manufacturing” and instead develop firms that can compete at scale on cost, quality and technology. According to the official NITI Aayog publication portal and related manufacturing reports, the agency has been building a broader policy push around industrial upgrading, global value chains and advanced manufacturing, with an emphasis on sector-specific solutions rather than a one-size-fits-all approach. Lahiri said the government’s role was to remove the barriers that hold companies back, adding: “We must diagnose the problem and solve it.”
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