NITI Aayog advocates for strengthening industrial clusters across India to build a resilient manufacturing sector, aiming for global leadership in 12 key industries by 2047 through targeted incentives, domestic value addition, and technological innovation.
NITI Aayog has pushed industrial clusters to become the backbone of India’s drive to emerge as a manufacturing hub, arguing that the sector is the country’s strongest route to absorbing a young labour force and creating more formal work. The think tank said manufacturing can take in workers across skill levels, improve productivity through better processes and technology and help turn India’s demographic advantage into jobs.
In a new study, titled “Key Sectors to Position India as a Global Manufacturing Hub”, the Aayog identified 12 industries where India could seek global leadership by 2047: electronics, telecom equipment, solar photovoltaic, pharmaceuticals, chemicals, automotive, defence and drone systems, steel, capital goods, textiles, food processing and leather and footwear. The first volume focuses on chemicals, textiles, telecom and network equipment and solar photovoltaic.
The report recommends cutting reliance on imports through targeted incentives and viability gap funding, which helps make projects financially viable when returns are weak. It also calls for greater domestic value addition, joint ventures, technology transfer, better labour productivity and wider export markets, alongside balanced free trade agreements. In chemicals, the Aayog highlighted products such as phenol, methanol and acetic acid as priorities, saying lower import dependence would conserve foreign exchange and reduce exposure to price swings.
At the launch, Ashok Lahiri, vice-chairman of NITI Aayog, said the ambition was not to match China on scale but to build productive capacity and expand India’s presence in global markets. He said private investment would need to do most of the heavy lifting, with government focused on removing obstacles and improving the business environment.
Tejveer Singh, secretary in the Department of Chemicals and Petrochemicals, said his department was working with other ministries on chemical parks and that a separate study under the Department for Promotion of Industry and Internal Trade was examining import substitution in high-value items. The report also flags weak labour productivity in textiles and says the answer lies in skilling, better labour welfare and more technology adoption.
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